Thane Court Sets Aside Order Against Finance Firm in Mira Road Flat Case

The Thane Additional Sessions Court set aside a Magistrate's order issuing criminal process against Borivali-based Aavas Financiers Ltd in connection with an illegal flat purchase in Mira Road that was later demolished by civic authorities. Presiding Judge R.S. Bhakare allowed the finance company's revision application on August 12, 2026, finding no prima facie material to proceed against the institution under Sections 406 and 420 read with Section 34 of the Indian Penal Code.

The case stemmed from a housing transaction in Mira Road, where a buyer entered into a registered agreement with Samarth Builders & Developers on July 30, 2014, to purchase a flat for Rs 8.12 lakh. To fund the purchase, the complainant secured a housing loan from Aavas Financiers, which transferred Rs 2,53,750 directly to the builder.

Following construction, civic authorities declared the building illegal and demolished the structure. The buyer subsequently filed a criminal complaint alleging cheating and criminal breach of trust against the parties involved. On March 1, 2021, the Judicial Magistrate First Class issued process against the finance company.

In his ruling, Judge Bhakare observed that summoning an accused in a criminal case is a serious matter and requires a Magistrate to carefully examine the record to ensure prima facie material exists before issuing process. The Sessions Court concluded that the lower court's March 1, 2021 order was not legal, correct, or proper.

The court noted that Aavas Financiers acted as a financial institution that provided a housing loan to the complainant, who had repaid equated monthly instalments until June 10, 2019. The court found that the lender received no wrongful gain from the transaction. Instead, the company suffered a wrongful loss of Rs 2,53,750, which had been transferred to the builder.

The court further highlighted that the complaint contained no averments showing a nexus between the builder and the finance company to cheat the buyer. Additionally, there were no allegations that property was entrusted to the financial institution or that it dishonestly misappropriated or converted any property for its own use.

While reviewing the buyer's allegations, the court noted that the complainant had stated the builder claimed the development plan was approved and introduced him to the finance company for loan assistance. The complainant also alleged harassment by the lender after he discontinued paying monthly instalments, but the court held there was no record to justify criminal proceedings against the firm under IPC Sections 406 and 420.