In a significant ruling, the Madras High Court has convicted a recovery officer of the Debt Recovery Tribunal (DRT), Madurai, along with several others, for conspiring to illegally undervalue and purchase properties during auction proceedings. The court sentenced them to five years imprisonment along with fines.
The case stemmed from an appeal filed by the Central Bureau of Investigation (CBI) challenging the acquittal of the accused by the Special Court for CBI Cases in Madurai. Justice K.K. Ramakrishnan, who heard the appeal, set aside the lower court’s acquittal order and convicted the accused, strongly criticizing their misconduct.
The court pointed out that the recovery officer, holding a public office, had a responsibility to protect and preserve the properties under his charge. However, the officer instead abused his authority by conspiring with other accused persons to undervalue and manipulate the auction process for personal gain.
“A recovery officer is a public officer and a trustee for the public. He is duty-bound to protect and preserve the property entrusted to him. Absolute disinterestedness is indispensable, and he must not hold any vested interest for personal profit or for others. In this case, conspiracy was established beyond doubt between A1 [recovery officer] and the rest of the accused,” the court emphasized.
The CBI's investigation revealed that the recovery officer, along with a clerk, two private individuals, and a bank manager, had planned the fraudulent auction of properties that were under a recovery process. The officer was found to have ignored a stay order from the Debt Recovery Appellate Tribunal (DRAT), Mumbai, and went ahead with the sale, allowing the properties to be bought at a price far below their actual market value.
The conspiracy involved using an outdated valuation report from 2006 for the auction held in 2008, which significantly reduced the property’s upset price. It was also revealed that the buyers included the wife of the recovery officer's subordinate, raising serious doubts about the fairness of the auction.
“Judicial acts must be performed with honesty and without any shadow of suspicion. As the saying goes, ‘Caesar’s wife should be above suspicion.’ In this case, the officer’s actions were found to be dishonest right from the attachment of the property to the issuance of the sale certificate,” the court noted.
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Rejecting the arguments raised by the defense, the court held that the actions of the recovery officer and others were not protected under the Judges Protection Act. The court clarified that judicial protection applies only when acts are performed in good faith and in line with the law — which was not the case here.
Further, the court underlined that the evidence clearly proved the conspiracy to defraud the bank and the property owner. The sale certificate was issued even before confirming the auction, and despite requests from the bank and the debtor to stop the process due to the stay order, the recovery officer continued with the sale.
The court held all the accused guilty under several charges, including:
- Criminal Conspiracy (Section 120B IPC),
- Breach of Trust by a Public Servant (Section 409 IPC),
- Cheating (Section 420 IPC), and
- Provisions under the Prevention of Corruption Act.
“The accused intentionally misused their positions and the law for personal gain. Their conduct reflects clear criminal intent and does not deserve any leniency,” the court firmly stated.
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The judgment not only highlighted the misuse of power by public officials but also sent a strong message about the seriousness of white-collar crimes in India’s financial and judicial systems.
Counsel for Appellant: Mr. C. Muthu Saravanan, Special Public Prosecutor for CBI cases
Counsel for Respondents: Mr. R. Balasubramanian, Senior Counsel for Mr. M. O. Thevan Kumar, Mr. A. Robinson, Mr. D. Malaichamy, Mr. G. Bhagath Singh, Mr. R. Mathialagan
Case Title: State v. S Kasimayan and Others
Case No: CRL.A(MD).No.297 of 2019
