Calcutta High Court quashes criminal case against Bajaj Finserv MD over loan dispute, says it is civil matter

The Calcutta High Court on Tuesday quashed criminal proceedings against the Managing Director of Bajaj Finserv and another company official in a case alleging cheating, criminal breach of trust, forgery and criminal intimidation over a personal loan transaction [Managing Director of Bajaj Finserv & Anr. v The State of West Bengal & Anr.].

Justice Ajoy Kumar Mukherjee held that the allegations stemmed from a dispute over the adjustment of loan repayments and the amount claimed by the finance company, and did not disclose any criminal offence.

The Court said the borrower's grievance, if any, could be pursued through civil remedies rather than criminal prosecution.

"The complaint (borrower) is conspicuously silent with regard to the nature of the documents allegedly forged by the petitioners and /or there specific role in manufacturing or forging any such document. The essence of common intention to do an illegal act before or after commission of offence has not been stated by the OP no.2 (borrower). Therefore, the dispute between the parties is purely civil in nature," observed the Court.

The case arose from a complaint filed by a borrower who had earlier purchased two mobile phones on equated monthly instalments (EMIs) through Bajaj Finance and had later availed a personal loan of ₹69,000 from the company.

She alleged that after seeking more time to pay her EMIs during the COVID-19 lockdown, the company closed her existing loan account and opened a new one without her consent. She further claimed that Bajaj Finance did not account for nearly ₹49,000 she had already repaid and instead raised a fresh demand under the new loan account.

Bajaj Finserv argued that the borrower had herself requested conversion of the loan into another loan product, which was authenticated through her registered mobile number.

It further contended that the dispute was purely about outstanding dues arising from an ongoing commercial relationship and did not amount to cheating or any other criminal offence.

Agreeing with the company's submissions, the Court said the material on record showed, at best, a disagreement over the adjustment of loan payments.

"Although from the facts and circumstances of the case and the arguments placed before the Court, it can be said that regarding adjustment of loan amount there might be a conflict between the parties but I am unable to appreciate the petitioners contention that it attracts any criminality, as a penal statute cannot be expanded by using implications," said the Court.

The Court noted that the complainant had admitted signing the subsequent loan agreement, although she claimed she had not been given an opportunity to read its contents before signing.

It held that this, by itself, did not amount to forgery, particularly when the complaint did not identify any allegedly forged document or specify the role of the accused in creating or fabricating such a document.

Finding that no prima facie case of cheating, criminal breach of trust, forgery or criminal intimidation was made out, the High Court quashed the criminal proceedings pending before the Additional Chief Judicial Magistrate, Berhampore.

Advocates Pratim Priya Dasgupta Om Srivastava, Amit Dey and Swastik Polley appeared for the Managing Director of Bajaj Finserv.

Advocates Partha Sarathi Bhattacharyya and Swarnali Saha represented the borrower.

[Read Judgment]