HC quashes criminal proceedings against Sukesh Gupta

November 24, 2022 08:45 pm | Updated 08:45 pm IST - HYDERABAD

Justice K. Surender of Telangana High Court has quashed the criminal proceedings initiated against city-based businessman Sukesh Gupta, his wife and two others in a case of cheating and criminal breach of trust.

Allowing the criminal petition filed by Mr. Gupta and others, the judge said the transactions between the complainant and the accused (petitioners) at best in the case can be described as a breach of contract or violation of agreement. For such violations, the remedy lies with the civil court, the judge said in his order.

SREI Equipment Finance Limited lodged a complaint with Hyderabad Central Crime Station in 2020 stating that the four petitioners availed a loan of ₹110 crore from it by mortgaging two properties. Since the borrowers failed to pay loan installments, the finance company got the first property of 8.08 acres of land at Hafeezpet in Serilingampally (mortgaged by the petitioners) auctioned by initiating proceedings under SARFAESI Act.

The auction fetched ₹102.60 crore. Later, the finance company decided to sell the second mortgaged property ( a house at King Kothi). The company claimed that by then the borrowers had sold off that house. The sleuths of CCS completed investigation and filed charge-sheet against the four petitioners.

The petitioners’ counsel V. Ravi Kiran Rao contended that Mr. Gupta and others entered into a memorandum of understanding with the finance company and issued three cheques towards the outstanding liability of ₹42.28 crore which included interest and other charges.

The judgement said that the finance company failed to present the cheques in the bank. Though the company said Mr. Gupta sent an e-mail to postpone presentation of the cheques, ‘nothing stopped the company from presenting the cheques and prosecuting the petitioners’, the verdict said.

“No dishonest intention can be deduced from the facts when the property mortgaged was genuine and fetched ₹102 crore”, the verdict said. The judge cited a Supreme Court judgment which said that ‘unless misrepresentation and deception are played at the inception, it cannot be said that it is an offence of cheating under Section 420 of Indian Penal Code’.

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