BENGALURU: The Karnataka High Court has quashed the criminal proceedings initiated against a borrower by the State Bank of India (SBI) accusing him of not repaying his loan for a flat which he had booked, but was sold to another buyer by the builder in violation of the tripartite agreement.
“This court is constrained to observe that the action of the bank in setting the criminal machinery in motion against the petitioner-customer, in the facts and circumstances of the present case, is wholly unwarranted and deserves to be deprecated. A financial institution, particularly a public sector bank, is expected to act with due care and circumspection before invoking the criminal process against a customer,” Justice Suraj Govindaraj observed.
The judge made these remarks while allowing a petition filed by Pritesh Bari, a resident of Mumbai, challenging the legality of the FIR registered against him in 2024 under various provisions of IPC with Shankarapuram police on an order passed by a magistrate in a private complaint filed by the assistant general manager of Basavanagudi branch of SBI.
The petitioner, who is accused No 1, is a purchaser of the flat from the developer. When he took the loan, the petitioner entered into a tripartite agreement with the bank and the builder. According to the complaint, the builder sold the flat, which was the subject matter of the loan transaction, to a third party without obtaining the consent of the bank in 2023. The loan amount of Rs 39.92 lakh was not repaid either by the petitioner or the developer.