In a recent judgment, the Kerala High Court ruled that the actions of bank officials during the process of taking possession of a building or apartment, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, are protected under Section 32 of the Act if done in good faith. The court’s decision came in response to a petition filed by officials of Punjab National Bank seeking to quash a First Information Report (FIR) lodged against them by an apartment owner.
The apartment owner had alleged that the bank officials unlawfully entered the building without consent and should be prosecuted for trespass. The bank had initiated proceedings under the SARFAESI Act against the complainant for defaulting on loan repayments. However, the court held that the officials’ acts were protected under the SARFAESI Act and were in line with the directives of the Chief Judicial Magistrate. The court further stated that the officials’ actions were carried out in good faith, as required by the provisions of the Act, and as part of their lawful responsibilities.
The FIR against the bank officials included charges under various sections of the Indian Penal Code, including house trespass and punishment for house trespass. The complainant had also accused the builder and bank officials of colluding to undertake illegal construction on paddy land, despite being aware of the environmental clearance requirements. The court clarified that while it does not have jurisdiction to examine the correctness of the allegations, it found the FIR to disclose cognizable offenses.
The court refused to quash the FIR with respect to charges under Sections 406, 409, 420, 120-B, and Section 34 of the Indian Penal Code. It emphasized that the veracity of the allegations would be assessed during the investigation stage. Additionally, the court noted that the final report of the police, which stated that no offense seemed to have been committed by the petitioners, did not provide grounds for the court to exercise its power under Section 482 of the Criminal Procedure Code.
The ruling brings clarity to the protection granted to bank officials acting in good faith under the SARFAESI Act. While the court acknowledged that the officials’ actions were not beyond scrutiny, it emphasized that any discrepancies could be challenged through appropriate legal channels. The judgment serves as a reminder that acts undertaken by officials in the execution of their statutory and lawful duties are shielded from criminal prosecution under Section 32 of the SARFAESI Act.
