Read Order: Rakesh Gupta @ Rakesh Varshney v. Union Territory, Chandigarh

Monika Rahar

Chandigarh, May 02, 2022: In a case where the petitioner mortgaged a plot in favour of the complainant-Bank but the bank could not trace the plot and FIR was registered against the petitioner on the premise that the sale deed was a fabricated document, the Punjab and Haryana High Court has held that it is only the civil Court which can declare a sale deed to be invalid.

The Bench of Justice Vikas Bahl further opined that the person who has executed the said sale deed (in favour of the petitioner) or the person who was the original owner of the said property did not raise a challenge in any such civil suit. 

The present petition was filed under Section 439 Cr.P.C. for grant of regular bail to the petitioner in an FIR under Sections 419, 420, 467, 468, 471 and 120-B of the Indian Penal Code, 1860.

The allegations contained in the FIR were to the effect that the petitioner mortgaged a plot in favour of the complainant-Bank and when the Bank officials visited the spot where the said plot was supposed to be situated, they found that the said property was not identifiable or traceable. 

As per the petitioner’s counsel, the Police strangely came to the conclusion that the sale deed dated December 8, 2005, executed in favour of the present petitioner was a forged and fabricated document. It was further contended that as of yet, no person challenged the said sale deed in any Court of law and further reference was made to the legal opinion given by the counsel for the Bank who opined that the petitioner had the right and the legal, valid and marketable title to mortgage the subject property. 

In the said legal opinion, reference was made to the original owner and various documents were executed to show a transfer of property from or original owner to the present petitioner. It was also submitted that the offence of forgery or cheating was not made out in view of the decision of the Supreme Court in Md. Ibrahim and Others v. State of Bihar and Another, (2009) 8 SCC 751. 

Also, it was pertinently argued that since the company (of which the petitioner was a former director) was not arrayed as an accused, under the provisions of the Indian Penal Code, the petitioner could not be made vicariously liable for the debt the company was liable to discharge. It was also submitted that the petitioner was in custody since November of 2021; the challan was already presented; the investigation was complete as regards the petitioner and there are as many as 26 witnesses, none of whom were examined. Lastly, it was contended that the entire case was based on documentary evidence and no purpose would be served by keeping the present petitioner in custody. 

The State Counsel on the other hand argued that the petitioner was involved in four more cases of similar nature which showed that the petitioner was a habitual offender. 

In rebuttal, the petitioner’s counsel submitted that the petitioner was already granted bail in all the said other cases and he further submitted that as per settled law, the facts of the present case were to be considered for the purpose of deciding the present bail application. 

The Court at the very out observed that the said sale deed was a registered document executed in favour of the petitioner with respect to the plot in question and that no challenge was made to it in a civil court or before any other forum. Further, the Court added that it is a matter of settled law that it is only the civil Court which can declare a sale deed to be invalid and the person who executed the said sale deed or the person who was the original owner of the said property did not file any such civil suit. 

Also, the Court noted that the present FIR was registered after a period of more than 12 years from the date of the registration of the said sale deed. The Court also considered the legal opinion furnished by the counsel of the bank.

The Bench said, “No challenge has been made to the said sale deed in a civil Court or before any other forum and it is a matter of settled law that it is only the civil Court which can declare a sale deed to be invalid. The person who has executed the said sale deed or the person who was the original owner of the said property has not filed any such civil suit.”

With respect to the allegation pertaining to the loan which was allegedly taken by the company, the Court noted that the company was not even made an accused. Thus, the question as to whether the petitioner could be made vicariously liable for the debt due from the company would be a matter of trial which would be decided finally during the course of trial, the Court held. 

With respect to forgery, apart from the fact that there was no challenge to the sale deed, the Court made reference to the Supreme Court in Md. Ibrahim’s Case (Supra) wherein it was held execution of such document (purporting to convey some property of which he is not the owner) is not an execution of a false document as defined under Section 464 of the Code. The Top Court that if what is executed is not a false document, there is no forgery and if there is no forgery, then neither Section 467 nor Section 471 of the Code are attracted.

The Court was of the view that the ratio of law laid down in the said judgment also leaned in favour of the petitioner. Additionally, the fact that the petitioner was in custody since November 2021, the charge sheet was already presented and there were as many as 26 witnesses none of whom were examined, were considered by the Court. 

Keeping in view these facts and circumstances, the present petition was allowed and the petitioner was ordered to be released. 

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