Madrasdated High Court · 2025

ORDERThis Civil Revision Case has been filed by the Petitioner seeking to set aside the Order dated 23.06.2023 in Crl.M.P.No.32622 of 2022 passed by the learned Judicial Magistrate No.VI, Coimbatore and consequently, to direct the Police to register FIR on the basis of the Complaint dated 02.09.2021.2. The brief facts of the case are that the Respondent/Accused who is running a departmental store in the name of “M/s.Strawberry Supermarket” had approached the Petitioner Bank to obtain a sum of Rs.10,00,000/- as loan under the scheme viz., “Pradhan Mantri Mudra Yojana”. The Respondent/Accused had represented to the Petitioner Bank that the stock-in-trade of his business is approximately valued around Rs.20,00,000/- and hence, he is eligible for the maximum loan amount of Rs.10,00,000/- under the said scheme. The Respondent/Accused had also produced documents evidencing that the stock-in-trade of his business was valued around Rs.20,00,000/-. Furthermore, Respondent/Accused had assured and confirmed to the Petitioner Bank that he had not obtained any other loans 2/13 https://www.mhc.tn.gov.in/judis from any Banks excepting from IDBI Bank and he had not hypothecated the stock-in-trade of his business with any other institution.3. The Petitioner Bank had inspected the business premises of Respondent/Accused, during inspection, the Petitioner Bank had observed the goods stored and displayed in the departmental store of Respondent/Accused and found the same to be satisfactory. Therefore, the Petitioner Bank had sanctioned a sum of Rs.10,00,000/- as loan to the Respondent/Accused under Loan Account No.62437946619. Initially, Respondent/Accused was regular in repaying the loan amount, but, subsequently, he started committing default in repayment of loan.4. In this background, on 04.11.2016, Petitioner Bank had received a communication from the IDBI Bank, Coimbatore Branch stating that the goods stocked in the departmental store of Respondent/Accused had already been hypothecated to their Bank and that the Respondent/Accused had borrowed a sum of Rs.25,00,000/- as loan from their Bank. After the receipt of said communication, the Petitioner Bank had conducted an enquiry. During enquiry, the Petitioner Bank came to know that Respondent/Accused 3/13 https://www.mhc.tn.gov.in/judis had cheated the Petitioner Bank by making false representation that he had not hypothecated the stock-in-trade of his business with any other institution.5. Subsequently, on 08.11.2016, Petitioner Bank had sent a Representation to the Respondent/Accused stating that their Bank had received a Letter dated 04.11.2016 from IDBI Bank, Coimbatore Branch requesting them to close the loan account of Respondent/Accused. On the very same day i.e., 08.11.2016, Respondent/Accused had sent a Letter to the Petitioner Bank stating that he will close the Mudra Loan Account on or before 31.12.2016. However, Respondent/Accused did not close his loan account as stated in the Letter dated 08.11.2016.6. On 21.02.2018, Respondent/Accused had sent another Letter to the Petitioner Bank requesting some time to close the loan account since his departmental store has been closed due to some issues. Then, the Petitioner Bank demanded the Respondent/Accused to repay the loan, but, the Respondent/Accused did not come forward to settle the outstanding loan amount and close the loan account.4/13 https://www.mhc.tn.gov.in/judis

7. Under these circumstances, Respondent/Accused had sent a Letter dated 02.11.2018 to the Petitioner Bank stating that he has sold all the hypothecated goods for Rs.24,00,000/- to one Mr.Sathyaseelan based on an alleged unregistered Memorandum of Understanding dated 11.08.2017 and the said Sathyaseelan will settle the loan on behalf of Respondent/Accused. Thereafter, Respondent/Accused had sent a Letter dated 16.04.2019 to the Petitioner Bank stating that he is ready to pay Rs.2.25 Lakhs as an initial payment and he will close the loan within 4 months and requested for One Time Settlement. However, Respondent/Accused did not repay the outstanding loan amount.8. Aggrieved by the false representations of Respondent/Accused, the Petitioner Bank had given a Complaint dated 02.09.2021 to the Deputy Commissioner of Police Crime, Coimbatore requesting to take action against the Respondent/Accused, pursuant to which, the Sub Inspector of Police, District Crime Branch, Coimbatore District had issued a Notice dated 30.05.2022, directing the Respondent/Accused to appear for enquiry before the Manager of Petitioner Bank on 03.06.2022. The Sub Inspector of Police, 5/13 https://www.mhc.tn.gov.in/judis District Crime Branch, Coimbatore District had closed the Complaint dated 02.09.2021 stating that there is no prima facie material to proceed against the Respondent/Accused.9. Thereafter, the Petitioner Bank had filed a petition in C.M.P.No.32622 of 2022 before the Judicial Magistrate Court No.VI, Coimbatore praying to direct the Deputy Commissioner of Police Crime, Coimbatore to register FIR against the Respondent/Accused for the offence under Section 420 of IPC. However, the learned Judicial Magistrate No.VI, Coimbatore vide Order dated 23.06.2023, dismissed the said petition. Hence, the Petitioner Bank has filed the present Criminal Revision Case for the relief stated supra.10. The learned counsel appeared for the Petitioner Bank submitted that Respondent/Accused had fraudulently obtained a loan from the Petitioner Bank by suppressing the fact that he had already hypothecated the goods stocked in his departmental store to the IDBI Bank, Coimbatore Branch and he had obtained a sum of Rs.25,00,000/- as loan from the said Bank. 6/13 https://www.mhc.tn.gov.in/judis

10.1. It is further submitted by the learned counsel for Petitioner Bank that when the Petitioner Bank inspected the business premises of Respondent/Accused, they did not find any sign board that the stock-in-trade of his business was hypothecated with IDBI Bank. If the Petitioner Bank was aware of the loan obtained by the Respondent/Accused from IDBI Bank, the Petitioner Bank would not have sanctioned any loan to Respondent/Accused.10.2. The learned counsel for Petitioner Bank also submitted that though the Respondent/Accused had sent several representations to the Petitioner Bank stating that he would repay the outstanding loan amount, but, he did not repay the same as he stated in his representations. Therefore, the Petitioner Bank had lodged a Police Complaint against the Respondent/Accused. However, no action was taken against the Respondent/Accused.10.3. It is submitted by the learned counsel for Petitioner Bank that the Petitioner Bank had filed a petition before the Court of Judicial 7/13 https://www.mhc.tn.gov.in/judis Magistrate No.VI, Coimbatore praying to issue a direction to the Police to register FIR against the Respondent/Accused, but, the learned Judicial Magistrate No.VI, Coimbatore has dismissed the said petition by erroneously holding that the Petitioner Bank has not proved that the Respondent/Accused had an intention to cheat the Petitioner. The learned counsel prayed that the impugned order passed by the learned Judicial Magistrate No.VI, Coimbatore is liable to be set aside since the same is perverse, illegal and improper in law.11. Heard the learned counsel for Petitioner Bank. There is no representation on behalf of the Respondent/Accused.12. On perusing the materials available on record, it is evident that Respondent/Accused had obtained a sum of Rs.10,00,000/- as loan under the scheme viz., “Pradhan Mantri Mudra Yojana” from the Petitioner Bank by hypothecating the stock-in-trade of his business. After obtaining the said loan, initially, the Respondent/Accused was regular in repayment of loan, but, later, he committed default. While so, it came to the knowledge of the Petitioner Bank that the Respondent/Accused had already obtained a sum of 8/13 https://www.mhc.tn.gov.in/judis Rs.25,00,000/- as loan from the IDBI Bank, Coimbatore by hypothecating the goods stocked in his departmental store. Therefore, the Petitioner Bank had called upon the Respondent/Accused to repay the outstanding loan amount, but, the Respondent/Accused did not come forward to repay the same. Therefore, Petitioner Bank had lodged a complaint before the Deputy Commissioner of Police Crime, Coimbatore requesting to take action against the Respondent/Accused, but, no action was taken against him.13. Subsequently, Petitioner/Bank had filed a petition in C.M.P.No.32622 of 2022 before the Court of Judicial Magistrate No.VI, Coimbatore praying to direct the Deputy Commissioner of Police Crime, Coimbatore to register an FIR against the Respondent/Accused for the offence under Section 420 of IPC, but, the said petition came to be dismissed on 23.06.2023. Hence, this Criminal Revision Case.14. According to the Petitioner Bank, the Respondent/Accused had obtained a sum of Rs.10,00,000/- as loan under the scheme viz., “Pradhan Mantri Mudra Yojana” by concealing the fact that he had already obtained a loan from the IDBI Bank, Coimbatore by hypothecating the goods stocked 9/13 https://www.mhc.tn.gov.in/judis in his departmental store. When the Petitioner Bank demanded the Respondent/Accused to repay the outstanding loan amount, the Respondent/Accused had sent several false representations to the Petitioner Bank stating that he would repay the outstanding loan amount, but, he did not repay the same. The act of cheating committed by the Respondent/Accused is punishable under Section 420 of IPC. 15. It is to be noted that in Paragraph No.6 of the impugned order, the learned Judicial Magistrate No.VI, Coimbatore has held that since the description of the hypothecated stocks is not clear in both Document Nos.1 & 2, this Court cannot come to the conclusion that the stocks alleged to be hypothecated in IDBI Bank are the same as the one hypothecated in Petitioner Bank. Therefore, it is evident that the Petitioner Bank has not furnished proper details to the Court regarding the stocks and receivables hypothecated by the Respondent/Accused and thus, the Court below has dismissed the petition by the Petitioner/Accused. 16. From a careful perusal of the Letters dated 08.11.2016, 21.02.2018, 02.11.2018 &16.04.2019 sent by the Respondent/Accused to the 10/13 https://www.mhc.tn.gov.in/judis Petitioner Bank, it is crystal clear that the Respondent/Accused had obtained loan from the Petitioner Bank by suppressing the fact that he had already obtained loan from another Bank and when the Petitioner Bank called upon the Respondent/Accused to repay the loan amount, Respondent/Accused has sent letters to the Petitioner Bank with a malafide intention to evade the repayment of loan. However, without considering all these aspects, the learned Judicial Magistrate No.VI, Coimbatore has erroneously dismissed the petition filed by the Petitioner Bank by holding that there is no sufficient material to conclude that the Respondent/Accused had an intention of cheating the Petitioner Bank at the inception.17. Considering the above facts and circumstances of the case and having regard to the submissions made by the learned counsel for Petitioner Bank, I am of the opinion that the Petitioner Bank has produced sufficient materials to establish that the act of Respondent/Accused would attract the offence punishable under Section 420 of IPC. Therefore, this Court is inclined to set aside the impugned order and allow this Criminal Revision Case.11/13 https://www.mhc.tn.gov.in/judis

18. Accordingly, Order dated 23.06.2023 in Crl.M.P.No.32622 of 2022 passed by the learned Judicial Magistrate No.VI, Coimbatore is set aside and this Criminal Revision Case is allowed. Consequently, the Jurisdictional Police, Coimbatore is directed to investigate and register FIR against the Respondent/Accused based on the Complaint dated 02.09.2021 given by the Petitioner Bank. 25.10.2025mrr Index: Yes/NoSpeaking Order (or) Non-Speaking OrderTo1.The Judicial Magistrate No.VI, Coimbatore.2.The Public Prosecutor, High Court, Madras. 12/13 https://www.mhc.tn.gov.in/judis T.V.THAMILSELVI, J.mrrCrl.R.C.No.2105 of 202525.10.202513/13