Bengaluru: A bank or a financial institution should act responsibly while invoking criminal processes against a customer, Karnataka high court observed in a recent judgement, giving relief to a homebuyer in a loan case.An outstanding loan cannot be a ground to start criminal proceedings, which cannot be reduced to a tool to recover money, Justice Suraj Govindaraj noted in the order passed on Sept 25.Pritesh Bari, from Bengaluru, was a signatory to the tripartite agreement involving the purchase of an apartment. According to SBI’s complaint, the builder had sold the property without the bank’s consent even though the Rs 40 lakh loan had not been paid by the petitioner or the developers/partners.SBI claimed Pritesh had said a registered sale deed would be executed in his favour, but he became irregular in servicing the loan.On the other hand, Pritesh claimed that as per the agreement, in the event of the builder cancelling the booking on account of loan default or project delay, then the builder would pay the amount received from the borrower to the bank.The agreement stipulated that the builder would not transfer the apartment to other buyers without the bank’s written consent.Justice Govindaraj noted the project was admittedly not completed, no sale deed was executed in favour of the petitioner and the property was subsequently sold to a third party.If the bank was aggrieved by the builder or by failure to honour the tripartite agreement, the same could have been pursued against the persons responsible in accordance with law. The bank, however, has proceeded against the petitioner merely because the loan account had not been cleared.The bank’s action is “wholly unwarranted” and deserves to be deprecated, the court said.
