Telangana High Court quashed forgery case against company as loan was already repaid

Repayment before legal proceedings on fabricated documents for obtaining the loan let a company escape from penalisation.

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HYDERABAD: Repayment before legal proceedings on fabricated documents for obtaining the loan let a company escape from penalisation.

The Telangana High Court has quashed a criminal case filed against a company,

M/s Achyutha Electrical and Industrial Private Ltd,

which had submitted fake and fabricated documents for obtaining a loan from Andhra Bank. The court maintained that even though the loan amount was sanctioned based on fabricated documents, the same was repaid by the accused much before issuing any notice to proceed legally.

“No doubt, fabricated documents were produced for availing loan from Andhra Bank. However, even prior to issuance of any notice or any kind of proceeding either civil or criminal being initiated by the Bank, the amount was repaid,” the court held.

The Bank had in fact ratified the transaction made by the second petitioner and received the amounts without raising any objections. The bank did not lodge any complaint against the second petitioner, pointed out Justice K Surender.

The High Court passed the order responding to a petition filed by Achyutha Electricals seeking to quash the criminal case initiated against the company and its Managing Director in 2018. The crime was registered against them in 2018 for forgery that is punishable under sections 468 and 471 of the IPC.

The prosecution submitted to the court that the petitioners produced a fake letter of credit along with a fake confirmation and acceptance letter for a sum of Rs 1,03,00,185. The fake letters were purportedly indicating that they were given by

Standard Chartered Bank to Andhra Bank in Hyderabad for sanctioning of the loan.

The Standard Chartered Bank, however, asserted that it had not issued any letter of credit or acceptance in support of the petitioners. This was stated when the probe was launched.

The petitioners, however, contended that the loan was sanctioned in February 2012, and the same was cleared within five months — in July 2012. When the loan was cleared, any proceedings against them were unwarranted. Hence the same must be quashed.

Justice Surender said that though a ‘prima facie’ case of “cheating” was made against the company and its MD as the fabricated documents were not in dispute, the court need not intervene owing to the fact that the loan was already cleared.

The Court laid emphasis that all loan amounts were repaid even before any proceeding or notice was served by any authority to the petitioners. Hence the forgery case was not maintainable and the same was closed.

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