K. VIRUPAKSHA & ANR.versusTHE STATE OF KARNATAKA & ANR.

1020                      [2020]REPORTS
                SUPREME COURT    2 S.C.R. 1020              [2020] 2 S.C.R.


 A                         K. VIRUPAKSHA & ANR.
                                        v.
                    THE STATE OF KARNATAKA & ANR.
                        (Criminal Appeal No. 377 of 2020)
 B                              MARCH 03, 2020
                   [R. BANUMATHI, S. ABDUL NAZEER
                         AND A.S. BOPANNA, JJ.]
              Securitisation and Reconstruction of Financial Assets and
       Enforcement of Securities Interest Act, 2002 – ss.13, 14, 17, 32 –
 C
       Respondent No.2 was sanctioned credit facilities amounting to
       Rs.2.68 crores by Bank – Property measuring 3 acres 2 Guntas was
       offered as security and a charge was created (Secured Asset) – As
       per the Bank, respondent no.2 did not repay the loan and his account
       was classified as Non-Performing Asset (NPA) – Ultimately, the Bank
 D     took possession of the secured asset – Auction notice issued –
       Challenged by respondent no.2 – Rejected by High Court –
       Respondent no.2 filed application u/s.17(1) – Dismissed by Debts
       Recovery Tribunal (DRT) for delay – Appellate Tribunal (DRAT)
       dismissed appeal– Respondent no.2 filed complaint u/s.200, CrPC
       against appellants who were working as Deputy General Managers
 E
       in the Bank (accused no.1) alleging connivance with auction
       purchaser which caused wrongful loss to him – FIR registered –
       Appellants filed petition u/s.482, CrPC – Dismissed – Held:
       SARFAESI Act is a complete code in itself which provides the
       procedure to be followed by secured creditor and also the remedy
 F     to the aggrieved parties including borrower – In such circumstance,
       if there is any discrepancy in the manner of classifying the account
       as NPA or in the manner in which the property was valued/auctioned,
       the DRT is vested with power to set aside such auction at the stage
       after the secured creditor invokes power u/s.13 – Though in the
       instant case the application filed by Complainant before DRT and
 G
       the appeal before DRAT were dismissed, the remedy ought to have
       been availed diligently – In that direction the further remedy by
       approaching the High Court to assail the order of DRT & DRAT is
       also available in appropriate cases – Instead, after dismissal of
       application before DRT, the impugned complaint was filed as an
 H
                                      1020
          K. VIRUPAKSHA & ANR. v. THE STATE OF                          1021
                   KARNATAKA & ANR.

intimidatory tactic and an afterthought which is an abuse of the        A
process of law – Criminal proceeding not sustainable in a matter of
present nature – Complaint and the order passed therein as also the
FIR insofar as the appellants are concerned stand quashed –
Complainant at liberty to avail his remedies if he assails the order
passed by DRT & DRAT – Code of Criminal Procedure, 1973 – ss.
                                                                        B
200, 482 – Penal Code, 1860 – ss.511, 109, 34, 120-B, 406, 409,
420, 405, 417 & 426 – Security Interest (Enforcement) Rules, 2002.
      Allowing the appeal, the court
       HELD: 1.1 The fact that the account of the Complainant
was classified as NPA is also the admitted position. In that regard     C
when a right accrues to the secured creditor to enforce the
security interest, the procedure as contemplated under Sections
13 and 14 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Securities Interest Act, 2002
(SARFAESI Act) is to be resorted to. Further the Security
Interest (Enforcement) Rules, 2002 provides the procedure to            D
be adopted with regard to the valuation and sale of the secured
asset. If the Complainant, as a borrower had any grievance with
regard to any of the measures taken by the secured creditor
invoking the provisions of Section 13 of the SARFAESI Act, the
remedy as provided under Section 17 of the SARFAESI Act was             E
to be availed. It is in that light the High Court in the writ
proceedings had arrived at such conclusion. At that point in time
the Complainant availed the remedy under the Act by filing the
application under Section 17. Since there was delay in filing, an
application was filed under Section 5 of the Limitation Act seeking
condonation of delay. The same was rejected on the ground of            F
delay against which an appeal is said to have been filed before
the DRAT and it was pending though it is now stated to be
dismissed. It is at that stage when it was still pending the impugned
complaint in P.C. No.389/2016 was filed, wherein through the
order dated 20.05.2016 it had been referred to an investigation         G
under Section 156 (3) of the Cr.PC. The sanction of loan, creation
of mortgage and the manner in which the sanctioned loan was to
be released are all contractual matters between the parties. The
Complainant is an industrialist who had obtained the loan in the
name of his company and the loan account was maintained by the
                                                                        H
1022           SUPREME COURT REPORTS                      [2020] 2 S.C.R.


 A     Canara Bank in that regard. The loan admittedly was sanctioned
       on 16.03.2009. When at that stage the amount was released and
       if any amount was withheld, the Complainant was required to take
       appropriate action at that point in time and avail his remedy. On
       the other hand, the Complainant had proceeded with the
       transaction, maintained the loan account until the account was
 B
       classified as NPA on 15.01.2013. Initially the issue raised was
       only with regard to the under valuation of the property when it
       was brought to sale. On that aspect, as taken note the writ
       proceedings were filed and the Single Judge having examined,
       though did not find merit had reserved liberty to raise it before
 C     the DRT, which option is also availed. It is only thereafter the
       impugned complaint was filed on 20.05.2016. [Paras 13, 15][1031
       B-F; 1032 E-F]
              1.2 The SARFAESI Act is a complete code in itself which
       provides the procedure to be followed by the secured creditor
 D     and also the remedy to the aggrieved parties including the
       borrower. In such circumstance as already taken note by the High
       Court in writ proceedings if there is any discrepancy in the manner
       of classifying the account as NPA or in the manner in which the
       property was valued or was auctioned, the DRT is vested with
       the power to set aside such auction at the stage after the secured
 E     creditor invokes the power under Section 13 of SARFAESI Act.
       The action taken by the Banks under the SARFAESI Act is neither
       unquestionable nor treated as sacrosanct under all circumstances
       but if there is discrepancy in the manner the Bank has proceeded
       it will always be open to assail it in the forum provided. Though
 F     in the instant case the application filed by the Complainant before
       the DRT has been dismissed and the Appeal No.523/2015 filed
       before the DRAT is also stated to be dismissed the appellants
       ought to have availed the remedy diligently. In that direction the
       further remedy by approaching the High Court to assail the order
       of DRT and DRAT is also available in appropriate cases. Instead
 G     the petitioner after dismissal of the application before the DRT
       filed the impugned complaint which appears to be an intimidatory
       tactic and an afterthought which is an abuse of the process of law.
       In the matter of present nature if the grievance as put forth is
       taken note and if the same is allowed to be agitated through a
 H     complaint filed at this point in time and if the investigation is
          K. VIRUPAKSHA & ANR. v. THE STATE OF                         1023
                   KARNATAKA & ANR.

allowed to continue it would amount to permitting the jurisdictional   A
police to redo the process which would be in the nature of
reviewing the order passed by the Single Judge and the Division
Bench in the writ proceedings by the High Court and the orders
passed by the competent Court under the SARFAESI Act which
is neither desirable nor permissible and the banking system
                                                                       B
cannot be allowed to be held to ransom by such intimidation. [Paras
16, 17][1032 F-G; 1034 A-E]
      Authorised Officer, Indian Overseas Bank & Anr. v.
      Ashok Saw Mill (2009) 8 SCC 366 : [2009] 11 SCR
      599 – relied on.
                                                                       C
      1.3 ORDER
      (i) The complaint bearing P.C. No.389/2016 and the order
dated 20.05.16 passed therein as also the FIR No.0152/2016
insofar as the appellants herein are concerned stand quashed.
      (ii) Insofar as the grievance of the Complainant, he is at       D
liberty to avail his remedies in accordance with law if he chooses
to assail the order dated 12.06.2015 passed in I.R. No.3044/2014
and the order dated 31.05.2017 passed in Appeal No.523/2015
by the DRT and DRAT respectively in accordance with law. [Para
19][1035 B-C]                                                          E
      State of Haryana v. Bhajan Lal (1992) Supp (1) SCC
      335 : [1990] 3 Suppl. SCR 259; United Bank of India
      v. Satyawati Tondon & Ors. (2009) 1 SCC 168 : [2008]
      SCR 28; General Officer Commanding, Rashtriya Rifles
      v. Central Bureau of Investigation & Anr. (2012) 6 SCC           F
      228 : [2012] 5 SCR 599 – referred to.
                      Case Law Reference
[1990] 3 Suppl. SCR 259        referred to        Para 9
[2008] 16 SCR 28               referred to        Para 12
                                                                       G
[2009] 11 SCR 599              relied on          Para 16
[2012] 5 SCR 599               referred to        Para 18
      CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 377 of 2020.
                                                                       H
1024            SUPREME COURT REPORTS                          [2020] 2 S.C.R.


 A           From the Judgment and Order dated 21.01.2019 of the High Court
       of Karnataka, Dharwad Bench in Petition under Section 482 bearing
       No. Crl. Petition No. 100323 of 2018.
              Brijesh Kumar Tamber, Ms. Mani Solanki, Advs. for the
       Appellants.
 B           Ms. Kiran Suri, Sr. Adv., Chandrashekhar A. Chakalabbi, Shiv
       Pandey, Awanish, Anshul Rai, Amith S.J., M/s. Aishwarya Kumar (for
       M/S. Dharmaprabhas Law Associates), Shubhanshu Padhi, Ashish Yadav,
       Rakshit Jain, Vishal Banshal, Joseph Aristotle S., Advs. for the
       Respondents.
 C            The Judgment of the Court was delivered by
             A. S. BOPANNA, J.
             1. Leave granted.
              2. The appellants herein were the petitioners in Criminal Petition
 D     No.100323/2018 which was dismissed by the High Court of Karnataka,
       Dharwad Bench through the order dated 21.01.2019. The said order
       was passed by the High Court while considering the petition filed by the
       appellants herein under Section 482 of the Cr.P.C. seeking that the order
       dated 20.05.2016 passed by the Principal Civil Judge & JMFC in PC
       No. 389/2016 referring the matter for investigation and consequential
 E
       registration of FIR in Crime No. 152/2016 by the Hubballi Sub-Urban
       Police Station for the alleged offences punishable under Sections 511,
       109, 34, 120-B, 406, 409, 420, 405, 417 and 426 of IPC be quashed. In
       the said proceedings the appellants herein are arrayed as Accused Nos.
       9 and 11 respectively. The appellants herein were at the relevant point in
 F     time working as the Deputy General Managers in the Canara Bank
       (Accused No.1), Circle Office at Hubbali, Karnataka.
              3. The brief facts leading to the present situation is that the
       respondent No.2 herein (hereinafter referred to as the ‘Complainant’)
       had approached the Canara Bank at Hubballi pursuant to which credit
 G     facilities were sanctioned on 16.03.2009. The total credit facility
       sanctioned amounted to Rs.2.68 crores. The property bearing Survey
       No. 213/2002 situated at Anchatageri Village, Hubballi measuring 3 acres
       2 Guntas was offered as security for the said loan and a charge was
       created. The said property is hereinafter referred to as the ‘Secured
       Asset’. As per the case of Canara Bank, the Complainant had not repaid
 H
           K. VIRUPAKSHA & ANR. v. THE STATE OF                             1025
           KARNATAKA & ANR. [A. S. BOPANNA, J.]

the loan amount and in that view having committed default, the account      A
of the Complainant was classified as ‘Non-Performing Asset’ (‘NPA’
for short) on 15.01.2013. The Canara Bank thus having invoked the
power under Section 13(2) of TheSecuritisation and Reconstruction of
Financial Assets and Enforcement of Securities Interest Act, 2002
(‘SARFAESI Act’ for short) had issued appropriate notices and ultimately
                                                                            B
the possession of the secured asset as contemplated under Section 14 of
the SARFAESI Act was taken on 22.03.2013. The secured asset was
thereafter evaluated and was brought to auction through the public notice
dated 13.10.2013 indicating the date of auction as 15.11.2013. The
reserve price of the secured asset was fixed at Rs.2,28,51,000/-. Though
publication was made, no bids were received in the auction proposed on      C
15.11.2013 and since the same was a public holiday declared in the
State of Karnataka the auction was postponed to 04.12.2013. Even on
the said date no bids were received.
       4. Accordingly, the Canara Bank had revised the valuation,
indicating the reserve price as Rs.1.10 Crore since the earlier reserve     D
price at a higher rate had not attracted purchasers and issued the fresh
auction notice dated 30.12.2013. The Complainant claiming to be
aggrieved by such action, assailed the auction notice in a Writ Petition
filed before the High Court of Karnataka, Dharwad Bench in Writ Petition
No. 100382/2014. The learned Single Judge having considered the matter,
apart from taking note of the contentions put forth by the Complainant      E
had also taken into consideration the alternate remedy available to the
Complainant under the SARFAESI Act and accordingly dismissed the
writ petition with cost of Rs.10,000/-, on 22.01.2014. The Complainant
assailed the said order by filing a Writ Appeal before the Division Bench
in WA No. 100349/2014. The Division Bench through the order dated           F
19.08.2014 dismissed the Writ Appeal. The Complainant thereafter
availed the remedy under Section 17(1) of the SARFAESI Act by filing
an application in IR No.3044/2014 (SA) and also accompanying the same
with an application under Section 5 of the Limitation Act bearing IA No.
4482/2014. The application seeking condonation of delay and
consequently the main application were dismissed by the Debts Recovery      G
Tribunal (‘DRT’ for short) through its order dated 12.06.2015. Pursuant
thereto the Complainant is stated to have filed an Appeal before the
Debts Recovery Appellate Tribunal, Chennai (‘DRAT’ for short) which
is also stated to be dismissed.
                                                                            H
1026             SUPREME COURT REPORTS                           [2020] 2 S.C.R.


 A            5. It is in the said backdrop the Complainant filed the complaint
       under Section 200 of the Cr.P.C in the Court of the Principal Civil Judge
       (Junior Division) & JMFC, Hubballi in P.C. No.389/2016 alleging that
       the Officers of the Canara Bank in connivance with the auction purchaser
       had caused wrongful loss to the Complainant. To the said complaint,
       apart from the Canara Bank, the highly placed officials, the appellants
 B
       herein, the valuers and the auction purchaser were shown as the accused.
       The said complaint being taken on record, the learned Magistrate has
       referred the same for investigation under Section 156(3) of Cr.P.C. and
       to submit a report. Based on such direction the FIR No.0152/2016 is
       registered. The appellants, therefore, claiming to be aggrieved had
 C     preferred the Criminal Petition under Section 482 of Cr.P.C in Criminal
       Petition No.100323/2018, which was dismissed by the High Court through
       the order dated 21.01.2019 which is assailed herein.
             6. Heard Mr. Brijesh Kumar Tamber, learned counsel appearing
       for the appellants, Ms. Kiran Suri, learned senior counsel for the
 D     Complainant, Mr. Shubhanshu Padhi, learned counsel for the State of
       Karnataka and perused the appeal papers.
               7. The learned counsel for the appellants would contend that apart
       from the appellants having no role in the transaction between the
       Complainant and the Canara Bank, being the Deputy General Managers
 E     and working at the Circle Office, even otherwise cannot be held liable to
       face a criminal action of the present nature. It is contended that the loan
       transaction and the account being treated as NPA due to the non-
       repayment of loan cannot be disputed. In that circumstance the entire
       action taken, upto the stage of the sale of the property is as regulated
       under the provisions of the SARFAESI Act which provides not only for
 F     the procedure but also for redressal of the grievance of the parties
       concerned. In that circumstance even if the grievance as sought to be
       made out by the Complainant are taken note, the same cannot form the
       basis for maintaining the criminal complaint and in such event the learned
       Magistrate without application of mind has directed investigation under
 G     Section 156(3) of Cr.P.C. which has led to the registration of the FIR. It
       is contended that in respect of the action taken by the Canara Bank, the
       complainant in fact has availed the remedy of filing the Writ Petition,
       Writ Appeal and thereafter the proceedings before the DRT as also
       DRAT and having failed therein has set criminal law into motion which
       is not bonafide and not sustainable in law. It is contended that the learned
 H
            K. VIRUPAKSHA & ANR. v. THE STATE OF                                   1027
            KARNATAKA & ANR. [A. S. BOPANNA, J.]

Judge of the High Court of Karnataka has not appreciated the matter in             A
its correct perspective. Instead, the learned Judge has arrived at the
conclusion that the investigation would not prejudice the appellants, which
is not justified. It is contended that when action is taken against a defaulter,
if the instant action is permitted, it would not be possible to discharge the
official functions and as such the instant case is a fit case where
                                                                                   B
interference was required but the High Court has failed to appreciate
this aspect of the matter. Further, it is also pointed out that the learned
Judge was not justified in rejecting the petition filed by the appellants
merely because the other petitions filed in Criminal Petition No.101258/
2016 and Criminal Petition No.101162/2016 filed by certain other accused
had been dismissed and a direction was issued to the police to file the            C
final report.
       8. The learned senior counsel for the Complainant would on the
other hand rely on the identical criminal petitions which had been
dismissed by the High Court insofar as Accused Nos.1 and 12 are
concerned. It is contended that though the loan of Rs.2.68 Crores was              D
sanctioned, only a sum of Rs.90 lakhs was disbursed and the remaining
amount was adjusted as repayment. It is further contended that the
secured asset which was worth more than Rs.4 Crores was undervalued
and ultimately sold for Rs.1.10 Crores in connivance with the auction
purchaser who is arrayed as Accused No.15. It is further contended
that the under valuation of the mortgage property is not the only issue            E
but the issue with regard to the non-disbursement of the entire loan and
the non-consideration of the three offers made by the Complainant for
One Time Settlement (‘OTS’ for short) are all aspects which are to be
investigated upon. It is contended that in such circumstance the
investigation as ordered by the learned Magistrate was justified and the           F
High Court has appropriately refrained from interfering in the matter at
this stage. It is, therefore, contended that the contention as urged in the
instant appeal by the appellants does not merit consideration and the
appeal is liable to be rejected. The learned counsel for the State of
Karnataka would contend that pursuant to direction issued by the learned
Magistrate the FIR had been registered and the investigation is in progress        G
and therefore, the same be permitted to be taken to its logical conclusion.
       9. Before adverting to the rival contentions urged on behalf of the
parties we have kept in perspective the decision of this Court in the case
of State of Haryana vs. Bhajan Lal (1992) Supp (1) SCC 335 placed
                                                                                   H
1028            SUPREME COURT REPORTS                           [2020] 2 S.C.R.


 A     for consideration by the learned senior counsel for the Complainant which
       lays down the parameters that are to be kept in view while exercising
       the extraordinary power/inherent power to quash the criminal proceeding.
       On stating the parameters, this Court has cautioned that the power of
       quashing a criminal proceeding should be exercised very sparingly and
       with circumspection and that too in rare cases. In that background,
 B
       keeping in view the nature of transaction and the manner in which the
       earlier proceedings were resorted to on the same subject matter, the
       present situation is required to be considered.
              10. As noted, the undisputed fact is that the Complainant had
       approached the Canara Bank for financial assistance, wherein the
 C     appellants herein were the Officers in the Circle Office. The Complainant
       had availed the loan facility to the tune of Rs.2.68 Crores on 16.03.2009.
       Though the Complainant contends that the entire amount of Rs.2.68
       Crores was not released, but only a sum of Rs.90 lakh was released
       and the remaining amount was adjusted as repayment, the question would
 D     be as to whether that aspect and the other aspects as raised with regard
       to the non-consideration of the OTS as also the value for which the
       property was sold and the manner in which it was sold could be
       investigated into by the police merely because allegations are made and
       certain sections of the Indian Penal Code are invoked when the action is
       resorted to and regulated under SARFAESI Act. While taking note of
 E     the sequence of events it is noticed that the secured asset though sold in
       the auction conducted on 31.01.2014 and the grievances as sought to be
       put forth at this point in the criminal complaint was available at that
       juncture, it is not as if the complaint was immediately filed. On the other
       hand, when the auction notice dated 13.10.2013 was issued, no grievance
 F     was made out by the Complainant before any judicial forum. However,
       the sale did not take place for want of purchasers and a fresh auction
       notice dated 30.12.2013 was issued indicating the reserve price at Rs.1.10
       Crores.
              11. At that stage the Complainant approached the High Court of
 G     Karnataka, Dharwad Bench in a Writ Petition filed under Articles 226
       and 227 of the Constitution of India in W.P. No.100382/2014. The auction
       notice dated 30.12.2013 was impugned therein. The allegation which is
       now sought to be put forth in the complaint filed under Section 200 of the
       Cr.PC wherein the appellants herein along with others have been accused
       of with regard to the under valuation of the secured assets was the very
 H
           K. VIRUPAKSHA & ANR. v. THE STATE OF                                 1029
           KARNATAKA & ANR. [A. S. BOPANNA, J.]

contention which was urged in the said Writ Petition. The learned Single        A
Judge in the said Writ Petition had taken note of the contention that the
reserve price in respect of the secured assets was fixed at Rs.228.51
Lakhs initially, thereafter in the subsequent auction conducted the same
was fixed at Rs.1.10 Crores and has thereafter concluded as hereunder:
      “Undisputedly, petitioner is the debtor and has suffered an order         B
      passed by jurisdictional Debt Recovery Tribunal. The Debt
      Recovery Tribunal, Bangalore has issued recovery certificate in
      favour of respondent-Bank to recover the said amount. Property
      mortgaged to respondent-Bank by the petitioner has been brought
      for sale by auction. In the event of Bank not adhering to provisions
      of SARFAESI Act in conducting the sale or there being any                 C
      infraction in this regard, petitioner has an alternate remedy available
      under SARFAESI Act. Hence, at the stage of auction being
      conducted by respondent-Bank for recovery of its legitimate dues,
      this Court would not interfere with said auction in the normal
      course.”                                                                  D
             “In the instant case, reserve price earlier fixed at Rs.228.51
      lakhs has not fetched customers and as such, respondent-Bank
      has fixed the reserve price at Rs.110 lakhs which would be the
      price with which the public auction starts and auction bidders are
      not permitted to give bids below the floor value or reserve price.        E
      If the petitioner is able to secure a customer or a bidder who can
      offer his bid for the value as proposed by the petitioner itself, it
      would be needless to state that secured creditor would definitely
      accept the said bid since earlier attempts by it to auction the
      property has been in vain.”
                                                                                F
             “In the instant case, as already noticed hereinabove,
      petitioner is a borrower and it had defaulted in payment of monies
      due to the Bank. In other words, public money due by petitioner
      to the Bank has not been repaid. Petitioner loan account having
      been classified as a ‘non-performing asset’, respondent-Bank has
      initiated proceedings under the SARFAESI Act to recover the               G
      dues. In the earlier auctions conducted, reserve price fixed was
      Rs.228.51 lakhs i.e., in the auction which was to be held on
      15.11.2013 and 04.12.2013. However, in the paper publication that
      has been issued on 30.12.2013 Annexure-C in the auction proposed
      to be held on 31.01.2014 at 3.30 p.m. (E-auction), reserve price          H
1030             SUPREME COURT REPORTS                            [2020] 2 S.C.R.


 A           has been fixed at Rs.110 lakhs. The grievance of the petitioner is
             that value of the property is more than Rs.405.21 lakhs and as
             such, property in question cannot be sold for a pittance. If value
             of the property as contended by petitioner is Rs.405.21 lakhs,
             nothing prevents the petitioner from getting a purchaser or a bidder
             to purchase the property for the said value and clear off the debts
 B
             due by it to the respondent which even according to petitioner is
             around Rs.285.71 lakhs as on 31.01.2014 (which was Rs.261 lakhs
             as on 11.10.2013). However, without taking said recourse,
             petitioner is attempting to stall the auction proceedings which is
             not permissible inasmuch as the respondent-Bank being a
 C           nationalised Bank which is the custodian of public money is taking
             steps to recover its dues by auctioning the property through e-
             auction and the action of respondent-Bank cannot be flawed.
             Respondent-Bank has adopted one of the courses suggested by
             the Hon’ble Apex Court in United India Assurance case referred
             to supra namely “Public Auction” by which process there would
 D
             be larger participation. If at all the auction is to be set-aside for
             any reason whatsoever, petitioner can take recourse to the remedy
             available under SARFAESI Act and get the sale set aside.
             However, petitioner cannot be permitted to stall the auction itself
             under extraordinary jurisdiction of this Court.”
 E                                                            (emphasis supplied)
               12. While arriving at such conclusion the learned Single Judge
       had kept in view the provisions as contained in the SARFAESI Act, as
       also the decisions of this Court, more particularly in the case of United
       Bank of India vs. Satyawati Tondon & Ors. (2009) 1 SCC 168. In
 F     that view though the learned Single Judge did not accept the contentions
       as put forth had also indicated that if at all the auction is to be set aside
       for any reason whatsoever, the Complainant who was the petitioner
       therein can take recourse to the remedy under SARFAESI Act and get
       the sale set aside. In that view the learned Single Judge was of the
 G     opinion that the Complainant cannot be permitted to stall the auction
       itself through the prayer made in the Writ Petition. The Complainant had
       assailed the said order in an intra-court appeal bearing W.A. No.100349/
       2014. The Division Bench by its order dated 19.08.2014 had taken note
       of the consideration made by the learned Single Judge with reference to
       the case of Satyawati Tondon & Ors. (Supra) and had accordingly
 H     dismissed the Writ Appeal.
           K. VIRUPAKSHA & ANR. v. THE STATE OF                                 1031
           KARNATAKA & ANR. [A. S. BOPANNA, J.]

        13. Having taken note of the nature of consideration made by the        A
High Court in the said writ proceedings and keeping in view the
proceedings on hand, in order to come to a conclusion as to whether in a
matter of the present nature the appellants should be exposed to the
ignominy of going through the process of criminal proceedings, it is also
appropriate to take note of the provisions as contained in the SARFAESI
                                                                                B
Act. The fact that the issue relates to the exercise of remedy relating to
a secured asset as defined under the Act cannot be in dispute. The fact
that the account of the Complainant was classified as NPA is also the
admitted position. In that regard when a right accrues to the secured
creditor to enforce the security interest, the procedure as contemplated
under Sections 13 and 14 of the SARFAESI Act is to be resorted to.              C
Further the Security Interest (Enforcement) Rules, 2002 provides the
procedure to be adopted with regard to the valuation and sale of the
secured asset. If the Complainant, as a borrower had any grievance
with regard to any of the measures taken by the secured creditor invoking
the provisions of Section 13 of the SARFAESI Act, the remedy as provided
                                                                                D
under Section 17 of the SARFAESI Act was to be availed. It is in that
light the High Court in the writ proceedings had arrived at such conclusion.
At that point in time the Complainant availed the remedy under the Act
by filing the application under Section 17 in I.R. No.3044/2014. Since
there was delay in filing, an application in I.A. No.4482/2015 was filed
under Section 5 of the Limitation Act seeking condonation of delay. The         E
same was rejected on the ground of delay against which an appeal is
said to have been filed before the DRAT and it was pending though it is
now stated to be dismissed. It is at that stage when it was still pending
the impugned complaint in P.C. No.389/2016 was filed, wherein through
the order dated 20.05.2016 it had been referred to an investigation under
                                                                                F
Section 156 (3) of the Cr.PC.
       14. The learned senior counsel for the Complainant no doubt
referred to the Criminal Petition No.101162/2016 and Criminal Petition
No.101258/2016 filed by the Accused Nos. 1 and 12 being dismissed by
the High Court and the same not being carried further and attaining
finality. Though that be the position, in the instant case the appellants are   G
before this Court to exercise the remedy available and as such the
dismissal of the said petitions cannot prejudice their case when this Court
is required to take a view on the matter though it has not been availed in
the earlier cases. Further the learned senior counsel has also referred to
the statements of two former Officers of the Canara Bank, namely,               H
1032             SUPREME COURT REPORTS                           [2020] 2 S.C.R.


 A     Gurupadayya and Bapu which was recorded during the course of the
       investigation and a reference was made by the learned senior counsel to
       the detailed report regarding investigation wherein the Investigating
       Officer, namely, the Assistant Police Sub-Inspector, Sub-Urban Police
       Station, Hubballi had concluded that as per the investigation it is found
       that all the accused persons with conspiracy and in collusion with each
 B
       other have cheated the Complainant by releasing only Rs.90 Lakhs out
       of the sanctioned amount of Rs.2.68 Crores and by later not releasing
       the remaining amount had caused economic stumbling block and sold
       the property mortgaged to one of the accused.
              15. The issue however is, as to whether such proceedings by the
 C     police in the present facts and circumstances could be permitted. At the
       outset the sanction of loan, creation of mortgage and the manner in
       which the sanctioned loan was to be released are all contractual matters
       between the parties. The Complainant is an industrialist who had obtained
       the loan in the name of his company and the loan account was maintained
 D     by the Canara Bank in that regard. The loan admittedly was sanctioned
       on 16.03.2009. When at that stage the amount was released and if any
       amount was withheld, the Complainant was required to take appropriate
       action at that point in time and avail his remedy. On the other hand, the
       Complainant had proceeded with the transaction, maintained the loan
       account until the account was classified as NPA on 15.01.2013. Initially
 E     the issue raised was only with regard to the under valuation of the property
       when it was brought to sale. On that aspect, as taken note the writ
       proceedings were filed and the learned Single Judge having examined,
       though did not find merit had reserved liberty to raise it before the DRT,
       which option is also availed. It is only thereafter the impugned complaint
 F     was filed on 20.05.2016.
              16. The SARFAESI Act is a complete code in itself which provides
       the procedure to be followed by the secured creditor and also the remedy
       to the aggrieved parties including the borrower. In such circumstance
       as already taken note by the High Court in writ proceedings if there is
 G     any discrepancy in the manner of classifying the account of the appellants
       as NPA or in the manner in which the property was valued or was
       auctioned, the DRT is vested with the power to set aside such auction at
       the stage after the secured creditor invokes the power under Section 13
       of SARFAESI Act. This view is fortified by the decision of this Court in
       the case of Authorised Officer, Indian Overseas Bank & Anr. vs.
 H     Ashok Saw Mill (2009) 8 SCC 366 wherein it is held as hereunder:
    K. VIRUPAKSHA & ANR. v. THE STATE OF                                 1033
    KARNATAKA & ANR. [A. S. BOPANNA, J.]

“34. The provisions of Section 13 enable the secured creditors,          A
such as banks and financial institutions, not only to take possession
of the secured assets of the borrower, but also to take over the
management of the business of the borrower, including the right
to transfer by way of lease, assignment or sale for realising secured
assets, subject to the conditions indicated in the two provisos to
                                                                         B
clause (b) of sub-section (4) of Section 13.
35. In order to prevent misuse of such wide powers and to prevent
prejudice being caused to a borrower on account of an error on
the part of the banks or financial institutions, certain checks and
balances have been introduced in Section 17 which allow any
person, including the borrower, aggrieved by any of the measures         C
referred to in sub-section (4) of Section 13 taken by the secured
creditor, to make an application to the DRT having jurisdiction in
the matter within 45 days from the date of such measures having
taken for the reliefs indicated in sub-section (3) thereof.
36. The intention of the legislature is, therefore, clear that while     D
the banks and financial institutions have been vested with stringent
powers for recovery of their dues, safeguards have also been
provided for rectifying any error or wrongful use of such powers
by vesting the DRT with authority after conducting an adjudication
into the matter to declare any such action invalid and also to restore   E
possession even though possession may have been made over to
the transferee.
37. The consequences of the authority vested in the DRT under
sub-section (3) of Section 17 necessarily implies that the DRT is
entitled to question the action taken by the secured creditor and        F
the transactions entered into by virtue of Section 13(4) of the Act.
The legislature by including sub-section (3) in Section 17 has gone
to the extent of vesting the DRT with authority to even set aside
a transaction including sale and to restore possession to the
borrower in appropriate cases. Resultantly, the submissions
advanced by Mr Gopalan and Mr Altaf Ahmed that the DRT has               G
no jurisdiction to deal with a post-Section 13(4) situation, cannot
be accepted.”
                                                (emphasis supplied)

                                                                         H
1034             SUPREME COURT REPORTS                            [2020] 2 S.C.R.


 A             17. We reiterate, the action taken by the Banks under the
       SARFAESI Act is neither unquestionable nor treated as sacrosanct under
       all circumstances but if there is discrepancy in the manner the Bank has
       proceeded it will always be open to assail it in the forum provided. Though
       in the instant case the application filed by the Complainant before the
       DRT has been dismissed and the Appeal No.523/2015 filed before the
 B
       DRAT is also stated to be dismissed the appellants ought to have availed
       the remedy diligently. In that direction the further remedy by approaching
       the High Court to assail the order of DRT and DRAT is also available in
       appropriate cases. Instead the petitioner after dismissal of the application
       before the DRT filed the impugned complaint which appears to be an
 C     intimidatory tactic and an afterthought which is an abuse of the process
       of law. In the matter of present nature if the grievance as put forth is
       taken note and if the same is allowed to be agitated through a complaint
       filed at this point in time and if the investigation is allowed to continue it
       would amount to permitting the jurisdictional police to redo the process
       which would be in the nature of reviewing the order passed by the learned
 D
       Single Judge and the Division Bench in the writ proceedings by the High
       Court and the orders passed by the competent Court under the
       SARFAESI Act which is neither desirable nor permissible and the banking
       system cannot be allowed to be held to ransom by such intimidation.
       Therefore, the present case is a fit case wherein the extraordinary power
 E     is necessary to be invoked and exercised.
              18. The appellants herein had also referred to the provision as
       contained in Section 32 of the SARFAESI Act which provides for the
       immunity from prosecution since protection is provided thereunder for
       the action taken in good faith. The learned senior counsel for the
 F     Complainant has in that regard referred to the decision of this Court in
       the case of General Officer Commanding,Rashtriya Rifles vs.
       Central Bureau of Investigation & Anr. (2012) 6 SCC 228 to contend
       that the defence relating to good faith and public good are questions of
       fact and they are required to be proved by adducing evidence. Though
       on the proposition of law as enunciated therein there could be no cavil,
 G     that aspect of the matter is also an aspect which can be examined in the
       proceedings provided under the SARFAESI Act.In a circumstance where
       we have already indicated that a criminal proceeding would not be
       sustainable in a matter of the present nature, exposing the appellants
       even on that count to the proceedings before the Investigating Officer
 H     or the criminal court would not be justified.
           K. VIRUPAKSHA & ANR. v. THE STATE OF                                1035
           KARNATAKA & ANR. [A. S. BOPANNA, J.]

       19. In that view, for all the reasons stated above we pass the          A
following:
                              ORDER
      (i) The complaint bearing P.C. No.389/2016 and the order dated
      20.05.2016 passed therein as also the FIR No.0152/2016 insofar
      as the appellants herein are concerned stand quashed.                    B

      (ii) Insofar as the grievance of the Complainant, he is at liberty to
      avail his remedies in accordance with law if he chooses to assail
      the order dated 12.06.2015 passed in I.R. No.3044/2014 and the
      order dated 31.05.2017 passed in Appeal No.523/2015 by the DRT
      and DRAT respectively in accordance with law.                            C

      (iii) The appeal is accordingly allowed with no order as to costs.
      (iv) Pending applications if any, shall also stand disposed of.

                                                                               D
Divya Pandey                                                 Appeal allowed.




                                                                               E




                                                                               F




                                                                               G




                                                                               H