Case BriefsHigh Courts

Andhra Pradesh High Court: C Praveen Kumar, J. allowed the petition and quashed the FIR in Crime No.294 of 2013 of II Town Police Station, Eluru.

The facts of the case are such that the informant was working as Manager in Central Bank of India wherein he availed a housing loan of Rs.5,00,000/- for constructing a house. The said house was mortgaged with the bank as security for the loan. In some sudden turn of events the Bank dismissed the informant from the service because of a conviction in a C.B.I. case. Later on, the Bank settled his benefits and paid Provident Fund after recovering the housing loan. The informant requested the Bank to release the title deeds and documents due to repayment and no outstanding dues but to no avail.

The informant claims to have been harassed because he belongs to Scheduled Caste. The informant thus approached the National Commission for Scheduled Castes for release of the title deeds and house documents and settlement of issues like Gratuity etc which was thereby settled. On 16-08-2013, the Bank Manager informed the informant that they have misplaced the documents and title deeds of his house and further the General Manager informed the National Commission for Scheduled Castes about the same and also informed them about the steps being taken against the local branch. Non-delivery of house documents lead to filing of the present report alleging the offences constitutes punishable under Section 3(1)(v) and 3(2)(vii) and Section 4 of POA, Act.

The present Criminal Petition was filed, under Section 482 Cr.P.C., seeking quashing of investigation in the crime of II Town Police Station, Eluru, registered for the offences under Section 3(1)(v), 3(2)(vii) and 4 of Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 [for short, “POA, Act”].

The Court after perusing Section 3(1) (v) and 3(2) (vii) and Section 4 of POA, Act, which deals with punishment for neglect of duties it is clear that these cannot be made applicable to the facts in issue. Section 3(2)(vii) postulates a situation where a person being a public servant commits any offence under this section i.e., Section 3(2) shall be punishable with imprisonment for a term which shall be less than one year but which may extend to the punishment provided for that offence. A reading of the above section makes it clear that it is only a punishment section and would get attracted, if an offence under Section 3(2) has been committed by a Public Servant.

The Court further observed that Section 4 of the POA, Act deals with punishment for neglect of duties, which defines that whoever, being a public servant but not being a member of a Scheduled Caste or Scheduled Tribe, willfully neglects his duties requires to be performed by him under this Act, shall be punishable with imprisonment for a term which shall not be less than six months but may extend to one year.

The Court concluded that it is no doubt true that the petitioners are Public Servants, working in a Bank where the informant has also worked and where he has taken loan. However, the averments in the First Information Report does not anywhere indicate any willful negligence of duties which were required to be performed under the POA, Act. On the other hand, the averments show misplacing of some documents, for which, the Head Office informed the National Commission for Scheduled Castes about the action which they intended to take.

The Court held “it is very clear that even accepting the allegations in the report to be true, no offence under the Scheduled Castes and Scheduled Tribes (POA) Act, is made out and as such, I am of the view that continuation of the proceedings against the petitioners, who are the Branch Manager, General Manager and Regional Manager of the Bank would be an abuse of process of law.” [N. Appa Rao v. State of AP, Criminal Petition No. 13548 of 2013, decided on 01-04-2022]

Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): The Division Bench of Justice Anant Bijay Singh, Judicial Member and Shreesha Merla, Technical Member held that the Banks cannot freeze accounts, nor can they prohibit the ‘Corporate Debtor’ from withdrawing the amount as available on the date of the moratorium for its day-to-day functioning.

Instant appeal was filed by Bank of India, Central Bank of India, Syndicate Bank and State Bank of India against the National Company Law Tribunal’s decision wherein the Adjudicating Authority allowed the application filed by the Resolution Professional under Section 14 read with Section 17 and Section 60(5) of the Insolvency and Bankruptcy Code, 2016.

Resolution Professional had sought a direction against the appellant Banks and Financial Institutions to reimburse the amounts appropriated by them after Insolvency Commencement Date, together with the amount appropriated towards interest payments and further to resume the working capital limits as available to the ‘Corporate Debtor’ as on the Insolvency Commencement Date.

Analysis, Law and Decision

Tribunal noted that the main case of the Appellant Banks was that this Tribunal vide an Order dated 09-08-2017 passed an interim order directing the Company to be run as a going concern, engaging all Banks where the Company had accounts, to co-operate with the IRP for the operation of the accounts.

Further, the IRP requested the banks to make available the limits which were subsisting as on the date of commencement of the process of Resolution. The LC facility was continued on request of the erstwhile RP and the LC Bills negotiated by the beneficiary Banks were retired by the ‘Corporate Debtor’. The amount was paid by the Company into their Cash Credit Account so that fresh LCs could be opened within the sanctioned limits to purchase necessary raw materials to keep the Company a going concern.

Section 17(1)(d) of the Insolvency and Bankruptcy Code states that the Financial Institutions maintaining the accounts of the ‘Corporate Debtor’ have to act on the instructions of the Interim Resolution Professional in relation to such accounts and furnish all information relating to ‘Corporate Debtor’.

Bench reiterated that Banks cannot debit any amounts from the account of the ‘Corporate Debtor Company’ after the Order of moratorium, as it amounts to the recovery of the amount.

 Moratorium Period

Tribunal expressed that Section 14 of the I&B Code overwrites any other provision contrary to the same and any amount due prior to the date of CIRP cannot be appropriated during the period of moratorium.

Keeping in view the above discussion, Bench opined that merely because the ‘Corporate Debtor’ had enough liquidity to run the Company as a going concern, the act of the Appellant Banks to adjust the credit balance in the Cash Credit Account towards the debit balance after CIRP commenced, cannot be justified.

Present appeal failed and hence was dismissed.

Further, the new management of the ‘Corporate Debtor Company’ sought the release of the title deeds of the Immovable Properties of the Company which were in possession of Bank of India.

Applicant stated that the non-applicant Bank declined to release the title deeds as conformation from Canara Bank was pending. Though vide an email Bank of India had cited ‘Issuance of No objection Certificate by Canara Bank’ as the ground for non-release of the title deeds.

Further, Section 31 of the Insolvency and Bankruptcy Code was referred which provided that the terms of the ‘Resolution Plan’ are binding on the Company, its employees, creditor and stakeholders. Clauses 3(c)(vii) and 3(c)(viii) of the Plan contemplate that title deeds are required to be released immediately upon distribution of Resolution Process.

Therefore, Bench held that since the debt had been legally extinguished, therefore withholding the title deeds and preventing the Company from being able to create security interest for securing the non-convertible Debentures issued to the Debenture Holders, in terms of the Plan would be unjustifiable.

Tribunal allowed the release of title deeds for effective implementation of the terms of the ‘Resolution Plan’.[Bank of India v. Bhuban Madan, 2021 SCC OnLine NCLAT 189, decided on 28-05-2021]

Advocates before the Court:


Mr Rajiv Ranjan, Sr. Advocate alongwith Dr Sudhir Bisla and Mr Rahul Adlakha, Advocates.


Mr Abhinav Vashisht, Sr. Advocate alongwith Mr Rajat Bector and Ms Charu Bansal, for R-1.

Ms Malak Bhatt, Mr Saurav Panda and Ms Anannya Ghosh, Advocates.