'Why Are Your Officials Left Out Of FIR?': Karnataka High Court Questions Bank For Giving ₹2 Crore Loan Over 'Non-Existing' Property

While hearing a case challenging a cheating FIR wherein a loan was offered for a property which allegedly does not exist, the Karnataka High Court on Tuesday (February 24) orally questioned the bank for not making allegations against it officials adding that without their connivance the alleged offence could not have been committed. 

The court further orally questioned as to why the petitioner–who had subsequently purchased the property, was made an accused in the FIR while the bank officials had been left out. 

Recently the high court had, in a case wherein an ICICI Bank customer was allegedly sanctioned a Rs. 50 Lakh loan while she was under digital arrest for 10 hours, orally remarked that it will ask the CBI to investigate as the case involved misuse of public money.

The respondent bank–HDFC bank had registered a complaint, which became the basis of an FIR pertaining to offences including Sections 420(cheating), 468(forgery for purpose of cheating), 120 (B) (criminal conspiracy) and 34 (common intention) IPC.

An amount was sought to be borrowed from the bank by one of the accused who is stated to be an NRI. A loan of Rs. 2 crore was granted to him; however it was alleged that there were no documents of the property he had kept as collateral. The petitioner is a co-accused who had purchased the subject property and he was the fifth in the line of purchase; he had moved the high court challenging the FIR. 

During the hearing Justice M Nagaprasanna orally said to the counsel for the bank:

"Definitely public money is involved. Where are the bank officers as accused? This cannot happen without the bank officers conniving with the accused...Bank officials today are indulging in everything, conniving with everybody. Who is the valuer who valued the property sitting in the chamber? Whose legal opinion is given that it is marketable title? Who released the amount? Modus Operandi definitely involves bank officials also. How have you made only these two accused?"  

The bank's counsel said that the allegation was that there is a collusion between the seller and the buyer.

To this the court said, "There is no property at all existing. How did you grant the loan? Who visited the property? Why have you left out the bank officials?...you want to leave out the bank officials?". At this stage the counsel for the bank said that he was told that had been some internal inquiry. 

To this the court said, "Criminal case should be registered against bank officials who are conniving with borrowers and eating away public money. How can you leave them?...It is public money for everybody. Bank officials treat it as if its their own money. You have registered the crime. Why did you leave your officers? If no property existing then how was loan of Rs. 2 crore granted?".

The court further orally said that the person who had taken money from the bank and had sold the property in the first instance had not been made an accused, the bank officials had not been made accused however the petitioner, fifth in the line of purchase of the property had been made an accused. 

In its order the court said,"It is un-understandable as to how bank officials granted a loan to Accused no. 1 without look at any of the documents, without looking into the existence of property or otherwise". 

Issuing notice on the petition the court directed the bank to file its objections to explain the steps taken towards officials of the bank and others involved in the transaction. 

It thereafter stayed the investigation with respect to the petitioner, however directing that the investigation with respect to other accused persons shall continue. 

Case title: SRI SANKEERTH T S v/s STATE OF KARNATAKA AND OTHERS

CRL.P 17439/2025