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Rs 1 lakh fine for false complaint

delhi Updated: Mar 05, 2009 23:55 IST
Harish V Nair
Rs 1 lakh fine for false complaint

The Judiciary has made clear its zero tolerance attitude against banks and financial institutions using goons to recover loans. But what if customers harass banks by levelling false complaints of use of muscle power by them?

The Delhi High Court says in such an even the complainants too will have to pay dearly.

Justice S.N. Dhingra sent across the message by imposing an “exemplary” fine of Rs one lakh on a jewellery company, Enchante, which filed a “false and frivolous” case against Citibank of harassment and theft by recovery agents seeking damages of Rs 21 lakh.

The jewellers had taken loans from the bank for financing four vehicles in 2001. But they could not pay EMIs after March 2003. The jewellers even moved the Board of Industrial and Financial Reconstruction in early 2000 and claimed to have been declared a sick industrial company in October 2002.

The company’s post-dated cheques got dishonoured and no EMIs were payed for nearly seven months. The jewellers told the court that the bank then took forcible possession of one of the vehicles, a Toyota quails, from Pawan Mehra, younger brother of Chand Mehra, the company’s director, on October 9, 2003 using goons.

They alleged that Mehra was dragged out of the car and not even allowed to remove personal belongings including jewellery worth Rs seven lakh from the car. It was also alleged that Mehra was forced to sign a blank vehicle surrender form. Two other cars were also confiscated.

But after perusing the documents on record, Justice Dhingra said: “It is clear that the jewellery company made false averment about placing jewellery inside the car and it having been taken away and the use of force…it is a false claim and deliberately raised to pressurise the bank.” The court said the bank had exercised its right under the contract of seizing the car after repeated after defaulting in payment.

Rejecting the argument that force was used against Pawan Mehra while recovering the car, the judge asked why no FIR was lodged and the matter reported only to the bank. Dismissing the suit with a cost of Rs one lakh, the court asked the jewellers to pay the amount to the bank.