If you are stuck in such a situation, here is what to do 🤷‍♂️

A resident of a town in Pradeshpur, Mr. Alok Kumar, is facing a severe issue with Navodaya Sahakari Bank. Initially, he had taken a small loan of ₹30,000, which he renewed. The bank later informed him that an amount of ₹40,000 was due. To settle this and maintain a balance, Mr. Kumar paid a total of ₹55,000, with the understanding that ₹40,000 would clear the loan and the remaining ₹15,000 would be deposited into his savings account. He possesses a receipt for this transaction.

Several months later, the bank offered him a new loan of ₹50,000. They collected all necessary documents from him and his wife, including a signed ₹200 bond paper. However, after about two weeks, the bank abruptly informed him that the loan application was rejected. When Mr. Kumar requested the return of his documents, the bank staff responded dismissively, stating they had been discarded.

Nearly a year passed, and Mr. Kumar received a shocking notice from the bank claiming an outstanding due of ₹90,000. This was baffling, as his previous loan was cleared, and the new loan was never disbursed. Upon checking his land revenue records, he discovered that his government-allotted plot had been fraudulently mortgaged for ₹2,50,000 without his knowledge or consent. When he confronted the bank, they demanded he pay ₹2,50,000 to release the mortgage, an amount he never received.

The situation escalated further when, another year later, he received a notice that his plot had been auctioned for ₹3,00,000. He did not receive any of the proceeds from this auction. Upon confronting the bank manager, not only was he dismissed, but he was also subjected to caste-based slurs. The manager callously stated, “We have deposited ₹25,000 in your account. Take it and leave.” Despite the alleged auction, the property’s land records still show Mr. Kumar as the owner, but the plot has been fenced off by an individual believed to be a relative of the bank manager.

Advice in such cases 📝

This is a clear case of organised fraud, criminal breach of trust, forgery, and misappropriation of property. The caste-based insults also bring the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act into play. The victim should take immediate, multi-pronged legal action.

• File a detailed First Information Report (FIR) with the police, citing all the relevant criminal offences.
• Simultaneously, file a complaint with the Banking Ombudsman for the bank’s gross misconduct and deficiency in service.
• File a civil suit in the appropriate court to declare the mortgage and subsequent auction null and void, and to seek an injunction against the person who has fenced the property.
• A separate complaint can be filed under the SC/ST (Prevention of Atrocities) Act for the casteist slurs.

Applicable Sections of Law ⚖️

The actions of the bank officials attract several penal provisions under Indian law, primarily the new Bharatiya Nyaya Sanhita (BNS), 2023.

• Section 316 of BNS, 2023 (Criminal Breach of Trust): The bank, being entrusted with documents and money, dishonestly misappropriated them.
• Section 318 of BNS, 2023 (Cheating and Dishonestly Inducing Delivery of Property): The bank cheated Mr. Kumar by making false promises and fraudulently creating a loan and mortgage on his property.
• Section 335 of BNS, 2023 (Forgery for the Purpose of Cheating): The documents used to create the mortgage were likely forged.
• Section 337 of BNS, 2023 (Using as Genuine a Forged Document): The bank used these forged documents to create the mortgage and conduct the auction.
• The Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989: For the caste-based insults made by the bank manager.
• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002: The bank appears to have grossly violated the procedures laid down in this Act for auctioning a secured asset. The entire process can be challenged before the Debt Recovery Tribunal (DRT).

If you are the complainant 🙋‍♂️

As the complainant, your first step is to consolidate all your evidence. Draft a comprehensive written complaint detailing the entire sequence of events, from the first loan to the fraudulent auction and the casteist remarks. Submit this complaint to the Station House Officer (SHO) of the local police station to register an FIR. If the police refuse, you can send the complaint to the Superintendent of Police (SP) by registered post. If there is still no action, you can approach the Magistrate’s court and file a private complaint under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, seeking a direction for the police to register an FIR and investigate.

If you are the victim 😢

As a victim of such a complex fraud, it is crucial not to feel intimidated. Your immediate priority should be to secure all your documents and stop any further direct communication with the bank officials, who are clearly hostile. Engage a competent lawyer immediately who can guide you through the parallel legal proceedings—criminal, civil, and regulatory (Banking Ombudsman/DRT). It is important to act swiftly to get a stay order or injunction from a civil court to prevent any third party from taking possession of your property based on the fraudulent auction.

How the police behave in such cases 👮

In cases of financial fraud involving banks, the police may sometimes be hesitant to register an FIR, often mischaracterizing it as a “civil dispute.” They might advise you to go to court. Do not be discouraged. Insist that the actions involve clear criminal offences like forgery, cheating, and criminal breach of trust, which are beyond a simple civil dispute. If the local police are uncooperative, escalating the matter to senior police officials or the judiciary through a private complaint is the correct and established legal path.

FAQs people normally have 🤔

• Can a bank mortgage my property without my knowledge?
  

  No. A valid mortgage requires a mortgage deed to be executed by the owner of the property. Forging documents to create a mortgage is a serious criminal offence.

  
  
• Can a government-allotted site be mortgaged or auctioned?
  

  Generally, yes, unless the terms of the allotment explicitly prohibit it. However, it can only be done legally by the rightful owner and following due process. A fraudulent auction without a valid underlying loan or mortgage is illegal and can be set aside by a court.

  
  
• Who should I approach first for justice?
  

  You should pursue multiple avenues simultaneously. File a police complaint for the criminal aspect, approach a civil court for an injunction and cancellation of the fraudulent transaction, and complain to the Banking Ombudsman against the bank.

  
  

What evidence is required? 📂

Strong evidence is key to winning such a case. You will need:

• The receipt showing the payment of ₹55,000.
• Bank statements showing the non-disbursal of the alleged ₹2,50,000 loan.
• Copies of the property documents (land revenue records) showing your ownership.
• All notices received from the bank.
• A copy of the complaint you file and any correspondence with the bank.
• If possible, the names of the bank officials you dealt with.

How long will the investigation take? ⏳

Legal proceedings in India, especially in complex fraud cases, can be time-consuming. The police investigation may take several months. The civil suit to cancel the auction and restore your property rights could take a few years. However, an interim injunction to protect your possession of the property can usually be obtained relatively quickly. Patience and persistent follow-up with your lawyer are essential.

Advocate Sudhir Rao, Supreme Court of India