Authority: High Court of Judicature at Madras

Order Date: 28.08.2026

Case Overview

  • Petitioner: G. Suyambulingaraja, employed as Zonal Development Manager, City Union Company.
  • Respondents: 1) The Inspector of Police, Central Crime Branch, Office of Commissioner of Police, Race Course Road, Coimbatore. 2) Kesavapandian (de‑facto complainant).
  • Petition: Criminal Original Petition (Crl.O.P.No.22894 of 2025) and Criminal Miscellaneous Petitions (Crl.M.P.Nos.15637 of 2025 & 2172 of 2026) filed under Section 528 of the BNSS, 2023, seeking (a) the FIR records in Crime No.74 of 2024 and (b) quash of the FIR as an abuse of process.
  • Allegations in FIR: Accused (including petitioner, identified as accused No.5) allegedly forged Guarantee Agreement, Letter of Revival, Cash Credit/Overdraft Agreement, Term Loan Agreement, Demand Promissory Note, Hypothecation Agreement, Consent Letter, Mandate Letter, Sanctioned Letter Copy and other documents by forging signatures of the complainant, his father Murugan, mother Ponnuthai and brother Arun Pandiyan. The forged documents were allegedly used to obtain an ex‑parte decree in Debt Recovery Tribunal (DRT) Coimbatore, O.A.No.173 of 2021, for a sum of Rs 5,08,09,959.35.
  • Background: The Bank filed O.A.No.173 of 2021 before DRT on 17.08.2020. The de‑facto complainant filed a writ petition (W.P.(MD)No.12480 of 2020) seeking mandamus for Covid‑19 loan disbursement; the writ was dismissed as the complainant was held a willful defaulter. DRT passed an ex‑parte decree on 31.10.2022 in favour of the Bank. The complainant applied in 2024 to set aside the decree; the application is pending.
  • Legal Contentions:
  • Petitioner’s Counsel (Mr. Sharath Chandran): Argues that once a civil decree is passed, criminal prosecution on the same documents amounts to abuse of process; no dishonest intention is shown; the FIR should be quashed.
  • Government Advocate (Mr. M. Mohamed Riyaz): Maintains that the FIR discloses cognizable offences (forgery, false documents, illicit loan sanctioning) and investigation must continue.
  • Senior Counsel for Respondent 2 (Mr. N.R. Elango): Claims systematic forgery by City Union Bank officials, asserting that the FIR is not dependent on the DRT decree and should not be dismissed.
  • Affidavit Evidence: Affidavit of Chief Manager (Legal Cell), City Union Bank, details loan disbursements and subsequent transfers from the borrower’s current account (No. 510909010112187) belonging to Natures Touch Clothing Private Limited. Key entries include:
  • 29‑06‑2019: Credit of Rs 7,90,000 (Loan 1) and subsequent transfers of Rs 1,29,000 to Winner Tex & Trading (guarantor), Rs 16,000 (twice) to Tamil Nadu Electricity Board, Rs 4,000 to Winner Tex & Trading.
  • 04‑09‑2019: Balance Rs 180.80; additional loan of Rs 25,00,000 credited on 07‑09‑2019 (Loan 2).
  • 07‑09‑2019: Transfers of Rs 1,00,008.85 (to Doshna), Rs 7,012.95 (to SP internet), Rs 20,002.95 (to Sri Ramiah), and Rs 4,70,000 by cheque.
  • 27‑12‑2019: Balance Rs 8,065.13 after transfer of Rs 1,00,008.85 to Manoranjen.
  • 30‑12‑2019: Credit of Rs 7,00,000 (Loan 3).
  • 31‑12‑2019: Transfers of Rs 43,008.85 and Rs 20,002.95 to Manoranjen via IMPS.
  • The affidavit asserts that the borrower utilised the loan amounts voluntarily through internet banking.
  • Bank’s Claim vs. Complainant’s Rejoinder: The bank alleges the borrower benefited from the loans; the complainant counters that loan proceeds were siphoned off and that certain IMPS payments (Rs 63,011.80) were made against Government of India Customs Department duty drawback refunds, not from loan proceeds.
  • Judicial Observations:
  • The court noted that the FIR is not an abuse of process merely because a civil decree exists; the decree of the DRT is not a “judgment in rem” under Section 41 of the Evidence Act and therefore does not bar criminal investigation.
  • The court referenced Supreme Court precedents (State of Haryana vs. Bhajanlal, 1992; K.G. Premshankar vs. Inspector of Police, 2002) and the Bombay High Court judgment in Sashidhar Jadgishan vs. State of Maharashtra (2026) to clarify that civil finality does not automatically preclude criminal prosecution.
  • The court emphasized that the truthfulness of the loan documents must be examined in the criminal investigation, and the investigation should continue pending the outcome of the pending application to set aside the DRT decree.

Final Outcome

  • The Criminal Original Petition seeking quash of FIR No.74 of 2024 is disposed of; the petition is dismissed.
  • All connected miscellaneous petitions are also closed.
  • The investigation into alleged forgery, false loan sanctioning, and related offences under Sections 465, 468, 471 and 120(B) of the IPC may proceed.

Topics: Court Order, Banking Fraud, Criminal Investigation