Daijiworld Media Network - Mumbai

Mumbai, Feb 7: In a significant ruling highlighting the fiduciary responsibilities of banks, a sessions court has directed the registration of an FIR and a full-fledged police investigation against Allahabad Bank and senior officials of its Andheri (East) branch for allegedly failing to return original property title deeds even after a borrower had fully repaid its loan.

Setting aside an earlier order of a Magistrate’s Court, Additional Sessions Judge Pravin V. Chatur held that the alleged refusal to return documents held in trust could attract serious criminal charges, including criminal breach of trust. Acting on the court’s directions, the Andheri (East) police registered an FIR on Saturday against the bank, its chief manager, senior general manager, and general manager.

The complaint was filed by Shelter Makers (India) Private Limited, which had availed loans from Allahabad Bank in 2009. According to the company, it deposited original property title deeds with the bank as part of a registered mortgage. Despite clearing the loan in full and receiving a “No Dues Certificate” on April 9, 2013, the bank allegedly failed to return the original documents even after repeated demands.

The sessions court found fault with the magistrate’s earlier approach, which had relegated the matter to a private complaint, effectively limiting it to a summary inquiry. Judge Chatur observed that such a course prevented investigators from searching for, seizing, or securing the original title deeds, or questioning the bank officials who were entrusted with their custody.

“Given the potential misuse of title deeds and the special fiduciary duty imposed on banking institutions, a police investigation is necessary to trace the documents, seize them, and determine whether offences under Sections 409 (criminal breach of trust), 420 (cheating), and 120-B (criminal conspiracy) of the IPC are made out,” the judge said.

The court also clarified that the existence of civil remedies, such as filing a recovery suit or seeking an injunction, does not bar criminal proceedings if the facts prima facie disclose criminal conduct. The judge noted that when original documents are lawfully deposited with a bank and are later withheld despite repayment and formal demand, the essential ingredients of criminal breach of trust may be attracted.

Emphasising the scope of Section 156(3) of the Criminal Procedure Code, which empowers courts to order registration of an FIR when police action is not forthcoming, the judge said the material placed before the court was sufficient to warrant a police probe. “Whether the evidence ultimately leads to a conviction is a matter for investigation and trial,” the order noted.

The sessions court allowed a revision application filed by the complainant through advocate Filji Frederick, challenging the magistrate’s June 2, 2022 order. The complainant company, represented by authorised signatory Nandkumar Harchandani, reiterated that the loan was sanctioned on September 19, 2009, followed by a registered mortgage deed on September 24, 2009, under which the original title deeds were deposited with the bank.

With the FIR now registered, police are expected to investigate the whereabouts of the documents and examine the role of bank officials in the alleged failure to return them.