Can't Let Credibility Of Indians Be Affected In UAE: Kerala HC Denies Relief To Businessman In Loan Fraud Case By Sharjah Based Bank

Rahman, the owner of Hexsa Oil and Gas Services, is accused of absconding from Dubai after taking a loan from the Invest Bank, Sharjah and diverting the money for his personal purposes.

Though Rahman argued that it is a civil matter relating to pure loan transaction, single bench of Justice Bechu Kurian Thomas refused to quash the FIR at this stage. It observed,

"...the credibility of Indians in UAE and of others who seek loans from banks can be prejudicially affected if such alleged frauds are permitted to be perpetrated by the citizens of this country, and when criminal proceedings are initiated, they are quashed without even being investigated."

Rahman argued that a decree for repayment was obtained by the bank in the civil proceedings. However, Court said this by itself cannot be a reason to assume that a criminal proceeding will not lie. "In certain circumstances, the criminal proceedings as well as civil proceedings can proceed simultaneously. Merely because a civil proceeding has been initiated does not mean that a criminal offence cannot be attracted. From the nature of the complaint and the allegations made thereon, it cannot be prima facie stated that the FIR is totally bereft of any legal basis."

Rahman is also under investigation by the ED for loan embezzlement and large scale cross border offence of money laundering.

Bank claimed that Rahman had given 84 cheques for repayment but the first cheque itself was dishonoured. He then became unreachable and later absconded from Dubai.

Rahman argued to attract the offence of cheating, the Bank must show that he had a fraudulent or dishonest intention from the initial stage of the promise.

Though the Court agreed with this contention, it added that intention and deception alleged will have to be gathered from the circumstances in each individual case. Thus, investigation becomes necessary. “The Court must always be circumspect and cautious in nipping off in the bud itself, an allegation to an offence, even before the investigation is completed,” it remarked and dismissed Rahman's plea.

Counsel for the Petitioner: Advocates Sri M. V. Amaresan, S. S. Aravind, S. Sreekumar

Counsel for the Respondent: Public Prosecutor Ashi M. C., Johnson Gomez, Sanjay Johnson, Sreedevi S.

Case No: Crl. M. C. No 1511/ 2021

Case Title: Abdul Rahman v State of Kerala and Others

Citation: 2024 LiveLaw (Ker) 449