The Allahabad High Court has held that lodging of FIRs and ECIR defaulter against Indiabulls is abuse of criminal process.
The bench of Justice Ashwani Kumar Mishra and Justice Ashutosh Srivastava has observed that initiation of criminal proceedings at the instance of borrower are instituted on the strength of suppression and concealment of relevant facts, with unexplained delay and malicious intent to thwart legitimate steps taken by Indiabulls to recover the financial assistance extended to the borrower. Such proceedings are also intended to create leverage in ongoing civil/arbitration proceedings between the parties. The criminal proceedings are, therefore, clearly an abuse of the process of law and deserve to be quashed.
Indiabulls sanctioned a loan facility of Rs.2478 crores to M/s Shipra Group of Companies; comprising various group companies including M/s Shipra Estate Limited; M/s Shipra Leasing Private Limited, M/s Shipra Hotels Limited etc. (borrowers) between the years 2017 to 2020.
Sixteen loans were sanctioned pursuant to which loan agreements were executed between Indiabulls and the borrowers. The dispute pertains to 14 out of these 16 loan agreements through which a loan of Rs.1686.10 crores is alleged to have been disbursed to borrowers.
On failure of borrowers to respond and clear the dues in terms of the notices issued as per loan agreements Indiabulls proceeded to issue loan recall notice to the borrowers. On 14.1.2021 a notice was also issued invoking provisions of Section 176 of the Contract Act in respect of the pledged shares of Kadam.
The amount demanded under the loan recall notices from the borrowers to the tune of Rs. 1763 crores approximately has not been paid. It is alleged by the petitioners that after October, 2020, the borrowers have not paid a single rupee towards repayment of loan and have initiated 43 separate and distinct legal proceedings against Indiabulls and its transferees to avoid repayment of loan availed by it.
It is the case of the petitioners that institution of criminal action vide impugned FIRs and ECIR is malicious and is with an intent to gain leverage in the ongoing civil/arbitration proceedings.
In the arbitration proceedings instituted by M/s DLF Limited also Mr. Justice Vikramjit Sen has been appointed an arbitrator and the proceedings are pending before the learned arbitrator. The Arbitrator has already passed an order of status-quo in respect of the 73 acre mortgaged land of Kadam. These proceedings and the orders passed therein are, however, not referred to in the two FIRs or the complaint of borrower.
After the borrowers failed to obtain any protection in respect of transfer of pledged shares before the Delhi High Court that the 1st FIR came to be lodged pursuant to the order of the Chief Judicial Magistrate.
The complaint contains assertion to the effect that M/s Shipra Group is engaged in real estate activity through its various group companies and needed finance for its four upcoming housing and commercial projects.
The Directors of Indiabulls contacted M/s Shipra Group and offered to provide loan of Rs. 1939 crore on concessional rates and to secure such transaction properties worth Rs. 6 thousand crore was kept as security in favour of Indiabulls by the borrowers i.e. M/s Shipra Group of Companies.
The court quashed the FIR & ECIR against Indiabulls.
Case Details
Case Title: Indiabulls Housing Finance Ltd. Versus State Of U.P.
Case No.: Criminal Misc. Writ Petition No. – 14101 Of 2023
Date: 20.12.2024
Counsel For Appellant: Kartikeya Saran
Counsel For Respondent: G.A.,Saumitra Dwivedi,Sikandar B. Kochar,Syed Imran Ibrahim
