APHC010255912021 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3521] FRIDAY,THE TWENTY SEVENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO CRIMINAL PETITION NO: 4252/2021 Between: 1.M/S SRI VISHNU BUILDERS,, A PARTNERSHIP FIRM, HAVING ITS OFFICE AT D.NO.27/1891, 3RD STREET, RAMJI NAGAR, ADITHYA NAGAR, NELLORE CITY, REPT. BY ITS MANAGING PARTNER DOMMALAPATI RAJASEKHARAM, S/O LATE SRINIVASULU NAIDU, HINDU, AGED- 52 YEARS, R/O- D.NO.27/1/891, 3RD STREET, RAMJI NAGAR, ADITHYA NAGAR, NELLORE CITY. 2.DOMMALAPATI RAJASEKHARAM,, S/O LATE SRINIVASULU NAIDU, HINDU, AGED- 52 YEARS, R/O- D.NO.27/1/891, 3RD STREET, RAMJI NAGAR, ADITHYA NAGAR, NELLORE CITY. 3.DOMMALAPATI VIJAYA LAKSHMI,, W/O DOMMALAPATI RAJASEKHARAM, HINDU, AGED- 45 YEARS, R/O- D.NO.27/1/891, 3RD STREET, RAMJI NAGAR, ADITHYA NAGAR, NELLORE CITY. 4.DOMMALAPATI HARSHAVARDHAN NAIDU,, S/O DOMMALAPATI RAJASEKHARAM, HINDU, AGED- 45 YEARS, R/O- D.NO.27/1/891, 3RD STREET, RAMJI NAGAR, ADITHYA NAGAR, NELLORE CITY. ...PETITIONER/ACCUSED(S) AND 1.THE STATE OF ANDHRA PRADESH, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF ANDHRA PRADESH AT AMARAVATHI. 2.MUMMADI RAMANAIAH, S/O VENKATA NARAYANA, HINDU, AGED- 42 YEARS, SENIOR BRANCH MANAGER, SYNDICATE BANK, ADITHYA NAGAR BRANCH, EMPLOYEE NO-524744, 2 RAMALINGAPURAM, NELLORE CITY. 3.GANDAVARAPU KEERTHY CHOWDARY, D/O KRISHNA MURTHY, ADVANCE OFFICER (FIELD OFFICER), HINDU, AGED 28 YEARS, SYNDICATE BANK, ADITHYA NAGAR BRANCH, RAMALINGAPURAM, NELLORE CITY. 4.DASINA BALAKRISHNA, S/O D.V.RAJASEKHARAM, HINDU, AGED- 56 YEARS, REGIONAND MANAGER, SYNDICATE BANK, REGIONAL OFFICE, OM SANTHI TOWERS, PLOT NO.5, RAITHWIK ENCLAVE, A.K.NAGAR, NELLORE CITY. ...RESPONDENT/COMPLAINANT(S): Counsel for the Petitioner/accused(S): 1.HARINATH REDDY SOMA Counsel for the Respondent/complainant(S): 1.PUBLIC PROSECUTOR (AP) 2.SREEDHAR VALIVETI The Court made the following: ORDER: Criminal Petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (for brevity ‘the Cr.P.C.,’) by the Petitioners seeking quashment of the proceedings in Crl.R.P.No.11 of 2019 on the file of the learned IV Additional District and Sessions Judge, Nellore. 2. Sri Harinath Reddy Soma, learned Counsel for the Petitioner submits that the impugned orders of the learned Magistrate as well as the learned Additional Sessions Judge suffer from serious infirmities in law and fact. The learned Courts below failed to appreciate that the Petitioners had placed on record substantial documentary evidence and sworn statements which prima facie established the malicious conduct of the accused. The rejection of the 3 complaint without a reasoned order amounts to non- application of mind and is contrary to settled principles of criminal jurisprudence. The Petitioners, being aggrieved parties, are entitled to have their complaint adjudicated on merits rather than dismissed cryptically. 3. It is further contended that the Petitioners’ firm is a reputed establishment engaged in construction and real estate business, having longstanding credibility in Chittoor, Nellore, and Prakasam Districts. The firm had availed a secured overdraft loan from Syndicate Bank, and despite maintaining credits in accordance with Reserve Bank of India guidelines, the accused officials, acting with mala fide intent, declared the account as a Non- Performing Asset. Such declaration was made without issuance of mandatory demand notice and was followed by a paper publication in Eenadu daily, thereby tarnishing the reputation of the Petitioners in the open market. This act itself demonstrates the malicious intention of the accused, which ought to have been taken cognizance of by the learned Magistrate. 4. Learned Counsel for the Petitioners submits that the accused, being bank officials, abused their official position by facilitating a retired partner to withdraw substantial amounts from the firm’s account, thereby rendering the loan account irregular. The Petitioners had duly executed a fresh partnership deed and submitted the same to the bank, yet the accused deliberately ignored it. The subsequent declaration of NPA and initiation of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity ‘the SARFAESI Act’), 4 without adherence to statutory requirements, clearly evidences a conspiracy and malicious design to injure the Petitioners’ reputation. The sworn statements of the complainant and witnesses corroborate this position, but the learned Courts below failed to evaluate them in their proper perspective. 5. It is urged that both the learned Magistrate and the learned Sessions Judge erred in holding that the accused were merely discharging their official duties. On the contrary, the material placed on record demonstrates that the accused acted beyond the scope of their lawful authority, with deliberate intention to defame and harass the Petitioners. The dismissal of the complaint in a perfunctory manner, without assigning cogent reasons, is unsustainable in law. Hence, the Petitioners pray to set aside the impugned orders and direct cognizance of the complaint, so that the accused may be prosecuted under Sections 500 and 120- B of the Indian Penal Code, 1860 (for brevity ‘the I.P.C.’). 6. Sri Sreedhar Valiveti, learned Counsel for the Respondent Nos.2 to 4 submits that the Petitioners, being partners of M/s. Sri Vishnu Builders, had availed an overdraft loan of Rs.45,00,000/- from Syndicate Bank and executed all necessary documents, including the loan agreement which clearly stipulated repayment within two years. In spite of this obligation, the Petitioners failed to discharge the loan by 31.12.2017, thereby necessitating lawful action by the bank officials. In accordance with the terms of the agreement and banking regulations, Respondents issued legal notices on 01.01.2018 and 04.01.2018 and subsequently published a notice in Eenadu 5 daily on 18.01.2018 declaring the account as NPA, while granting 60 days’ time to clear the dues. The Petitioners made only nominal part payments of Rs.40,000/- and Rs.75,000/-, which were duly considered by the bank, and the account was accordingly upgraded. Learned Counsel further contends that the acts of Respondents were strictly within the scope of their official duties and in compliance with ‘the SARFAESI Act’, without any element of criminal intent or malice. The sworn statements of the Petitioners and their witness do not disclose any offence under Sections 500 or 120- B of ‘the I.P.C.,’ and the allegations of defamation are unfounded. The learned Courts below, after considering all relevant factors, rightly dismissed the private complaint, and also rightly dismissed the Revision Petition, which was vague and devoid of merit. 7. Sri A.Sai Rohith, learned Assistant Public Prosecutor submits that echoing the submissions of Counsel for Respondents Nos.2 to 4, submits that the Petitioners, having availed an overdraft loan of Rs.45,00,000/- from Syndicate Bank, failed to discharge their contractual obligation by 31.12.2017. Consequently, the bank officials, acting lawfully under the loan agreement and ‘the SARFAESI Act’, issued notices on 01.01.2018 and 04.01.2018, followed by a paper publication on 18.01.2018 declaring the account as NPA. The nominal part payments made by the Petitioners were duly considered, and the account was upgraded. The learned Assistant Public Prosecutor emphasizes that these acts were bona fide, within the scope of official duties, and devoid of criminal intent or malice. The sworn statements disclose no offence under 6 Sections 500 or 120- B of ‘the I.P.C.,’ and the allegations of defamation are baseless. The learned Courts below rightly dismissed the complaint and Revision Petition, and their orders warrant no interference. 8. The primary offences alleged by the Petitioners were under Section 500 read with Section 120-B of ‘the I.P.C.’ Section 499 of ‘the I.P.C.,’ defines defamation as the making or publishing of any imputation concerning a person with the intention of harming, or knowing or having reason to believe that such imputation will harm, the reputation of that person. Section 500 of ‘the I.P.C.,’ prescribes punishment for the offence so defined. Crucially, Section 499 of ‘the I.P.C.,’ itself carves out several exceptions, the most relevant being the tenth exception, which protects the publication of information made in good faith for the protection of the interests of the person making it, or of any other person, or for the public good. Exception one also provides that it is not defamation to impute anything which is true concerning any person, if it be for the public good that the imputation should be made or published. 9. Section 120-B of ‘the I.P.C.,’ deals with criminal conspiracy, which requires the prosecution to establish that two or more persons agreed to do or cause to be done an illegal act or a legal act by illegal means. The threshold for attracting criminal conspiracy is not merely that multiple persons acted in concert, but that they did so pursuant to a meeting of minds directed at an unlawful object. 10. For a private complaint to result in cognizance being taken by a learned Magistrate under Section 190 of ‘the Cr.P.C.,’ the sworn statements and 7 materials placed on record must prima facie disclose the commission of an offence. The learned Magistrate is not required to act as a mere post office and is entitled, indeed obligated, to apply judicial mind to the complaint and the supporting material to determine whether a case is made out. If the materials do not disclose any offence, the learned Magistrate is empowered to dismiss the complaint. Similarly, in revision, the learned Sessions Judge exercises supervisory jurisdiction and examines whether the learned Magistrate's order suffers from any illegality, impropriety, or material irregularity. 11. Under ‘the SARFAESI Act’, a secured creditor is entitled to classify a loan account as a Non-Performing Asset upon default and thereafter take measures for recovery of secured debts without the intervention of a court. The SARFAESI Act mandates issuance of a demand notice under Section 13(2) before proceeding further, granting the borrower sixty days to respond and discharge the liability. Publication of notices in newspapers is a recognised mode of service and constructive notice under banking regulations and ‘the SARFAESI Act’ framework, particularly where personal service is either impractical or already attempted. 12. The Court, affirming the concurrent findings of the learned Magistrate and the learned Sessions Judge, found that the acts of the Respondent bank officials were squarely within the ambit of their official duties and were performed in compliance with the terms of the loan agreement and the statutory requirements of ‘the SARFAESI Act.’ The overdraft loan of 8 Rs.45,00,000/- was admittedly availed by the Petitioners' firm, and the loan agreement clearly stipulated repayment within two years, the deadline for which was 31.12.2017. The Petitioners admittedly failed to discharge the loan by this date, and their part payments of Rs.40,000/- and Rs.75,000/- were nominal and insufficient to regularise the account. It was only upon these part payments being considered that the account was upgraded, which itself demonstrates that the bank officials acted fairly and in accordance with due process rather than with any malicious intent. 13. The issuance of legal notices on 01.01.2018 and 04.01.2018 and the subsequent publication in Eenadu daily on 18.01.2018 were found to be lawful acts performed in the discharge of statutory obligations. Far from constituting defamation, the publication of the NPA declaration was a step mandated by the regulatory framework governing secured creditors, intended to protect the interests of the bank and its depositors. This Court finds no element of criminal intent or malice on the part of the Respondents, which is an essential ingredient for the offence of defamation under Section 499 of ‘the I.P.C.’ The protection offered by the exceptions to Section 499 of ‘the I.P.C.,’ particularly relating to acts done in good faith in the interest of the person making them and in discharge of a public duty, was fully applicable to the Respondents' conduct. 14. On the question of criminal conspiracy under Section 120-B of ‘the I.P.C.,’ no material whatsoever was found to suggest that the bank officials had entered into any agreement to harm the Petitioners. The allegations of 9 conspiracy were bare and unsupported, resting entirely on inferences that the Petitioners sought to draw from what were otherwise routine banking actions. The sworn statements of the complainant and his witnesses, when examined objectively, did not disclose any meeting of minds among the accused directed at an unlawful purpose. 15. The allegation that the accused facilitated a retired partner to withdraw funds and then deliberately ignored the fresh partnership deed was considered by the learned Courts below, but was found insufficient to establish criminal conduct in the absence of any material showing that these acts were done with the intention of injuring the Petitioners' reputation or with any unlawful motive. Internal disputes regarding the partnership and its reconstitution were civil matters that did not automatically translate into criminal liability for the bank officials who were dealing with the account in the ordinary course of business. 16. The learned Courts below therefore rightly concluded that the private complaint was an attempt to criminalise what were essentially civil and regulatory banking actions. The dismissal of the complaint by the learned Magistrate without proceeding to issue process was upheld as legally sound, since taking cognizance and directing the accused to face trial, in the absence of a prima facie case, would itself have amounted to an abuse of the process of law. The learned Sessions Judge's dismissal of the revision petition on the ground that it was vague and devoid of merit was similarly sustained, as the Petitioners failed to demonstrate any error in the learned Magistrate's 10 approach or any material that had been overlooked. This Court finds no grounds to interfere with these concurrent findings. 17. Accordingly, the Criminal Petition is dismissed. As a sequel, miscellaneous petitions pending, if any, shall stand closed. ________________________ Dr. Y. LAKSHMANA RAO, J Dated: 27.02.2026 VTS